[Thank You Rush]

Thank you for that. You’re apparently more in tune with the nitty gritty of the investment of SS funds than I am...I DO know that it could be changed if Congress would do their jobs for the American people and change it. Letting us use our own contributions for investment makes more sense than anything the government comes up with. I guess THEY are looking out for us as we’re not smart enough to take care of ourselves - besides we might spend too much money buying lottery tickets - can’t have that!

[Tell It Right]

Thanks, TYR. See cbgb's post 61 enlightening us about "special issue" treasuries sold only to the SS fund. That's a new wrinkle on top of what I posted.

Also, don't make too much about my statement of China being the largest foreign owner of U.S. treasuries. Every now and then China sells some and Japan buys some making Japan the largest foreign debt holder, then they swap places back. It's probably best to think of China and Japan always tying for first place as our largest foreign debt holders.

But for the most part, it's American institutions that own US debt. For most of my life it was the SS fund that had the most. Then with our decade and a half of Quantitative Easing by the Federal Reserve and them increasing their balance sheet, the Fed Reserve became the largest US debt holder. With the recent Quantitative Tapering (reducing the Fed's balance sheet), I wouldn't be surprised if the SS fund is now back to being #1.

And then there's all the state-run pension plans. If you add them all together they are a sizable chunk of US debt holders. Particularly with the PBGC pension insurance regulations (think FDIC for banks, only for pensions) saying only a portion of a pension's investments can be in equities. Given that the PBGC's regulations say that the "safe" portion of pension investments can be in bonds, and since treasury bonds have a better return that savings accounts but are safer than corporate bonds, the federal government is basically saying through the PBGC regulations that state pensions have to have a significant portion of investments in US debt. IMHO, that's the federal government forcing the states to invest in the federal government, which drives up the price of treasuries (lowering treasury rates).