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To: Redmen4ever
About 80 percent of this year’s deficit was provided (a bit indirectly) by newly printed money.

Closer to 54%. The Fed held about $2.3 trillion in Treasuries on 1/2/2020 and about $4.6 trillion on 12/17/2020.

The debt held by the public went from $17.16 trillion to $21.45 trillion on the same dates.

2.3/4.29 = 53.6%

97 posted on 12/25/2020 7:07:17 PM PST by Toddsterpatriot (TANSTAAFL)
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To: Toddsterpatriot

Increase in National Debt from 2019 Q3 to 2020 Q3 $3.3T

(26.5T - 23.2T)

https://fred.stlouisfed.org/series/GFDEBTN

Increase in Federal Reserve holdings of National Debt from 2019 Q3 to 2020 Q3 $2.5T

(4.9& - 2.4T)

https://fred.stlouisfed.org/series/FDHBFRBN

2.5T/3.3T = 76% (I said 80% without the benefit of calculation)

Comment: I would prefer to use 12 month changes ending 4Q but they’re not in the handy dandy FRED database. My numerator (upstairs figure) is close to yours. Our denominators (downstairs figures) differ as I use national debt and you use national debt held by the public. The increase is the national debt reflects the deficit on a unified budget basis.

The national debt held by the public has risen by more than the national debt has risen because agencies and trust funds of the federal government have been running down their holdings (as was foreseen a long time ago, with the baby boomers having reached retirement age). We’re supposed to be running surpluses on the operations side of the federal government to off-set (essentially, to redeem) the sale of these holdings. But, no, we are instead running a deficit that’s a larger percentage of GDP than we did during WWII. (I say this without benefit of calculation.)

Any decent economist would recognize the risk of inflation we are taking, and not minimize this risk. But, the truth is, there’s no stopping the madness. Only a handful of people in Washington are even concerned about the deficit.

All people who are still capable of rational thinking can do is take prudent steps to protect themselves from this inflation. Again, look at your portfolio, move out of fixed income securities and into equities, equity REITs and (for the squeamish) the CPI-indexed bond.

The converse is: now (and I mean right now) is a good time to buy a home with a fixed-rate mortgage and to refi an existing mortgage with a fixed-rate.


105 posted on 12/26/2020 3:29:36 AM PST by Redmen4ever
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