Posted on 02/03/2011 11:26:48 AM PST by FromLori
No wonder Geithner called in all the Treasury secretaries for a dinner meeting this past Sunday.
The Federal Reserve has surpassed China as the leading holder of US Treasury securities even though it has yet to reach the halfway mark in its latest round of quantitative easing, according to official figures.
Based on weekly data released on Thursday, the New York Fed’s holdings of Treasuries in its System Open Market Account, known as Soma, total $1,108bn, made up of bills, notes, bonds and Treasury Inflation Protected Securities, or Tips, reports FT.
According to the most recent US Treasury data on foreign holders of US government paper, China holds $896bn and Japan owns $877bn.
And get this. "By June [the Fed] will have accumulated some $1,600bn of Treasury securities, likely tobe in the vicinity of China and Japan’s combined holdings,” Richard Gilhooly, a strategist at TD Securities, told FT.
I hope you are ready for inflation. This is not going to stop anytime soon. Remember, Social Security, which used to buy up to 25% of all Treasury securities is now a net liquidator of them. If not the Fed, then who is going to buy this paper?
We are headed into an extremely dangerous inflationary period
We now owe ourselves more money than we owe to China.
And this is a good thing because?
Now we can pay ourselves the money we owed ourselves and then use that money we owed to ourselves to pay China what we owe them.
‘We now owe ourselves more money than we owe to China.”
AND JAPAN by June
http://www.ft.com/cms/s/0/120372fc-2e48-11e0-8733-00144feabdc0.html#axzz1CvUHqQkr
“And this is a good thing because?”
It’s not a good thing at all.
Huge deficits like the USA has now only exist because the FED "buys" the debt. Without the ability to run huge deficits, the Government must greatly reduce its activities, and subject itself to the will of the market, and those taxes it can extract from the population. We have already seen that the Government has basically maxed-out what it can take directly in taxes from the people. Now the only way left is to stealthily tax you through inflation.
Looked at another way - this proves that the FED is the main pillar of the progressive movement.
The FED should be the main target of all conservatives.
The Fed holds $1.1 trillion in Treasury debt. You could erase $1.1 trillion and the government would still be $12.9 trillion in the hole.
I'm not saying the Fed buys ALL US Gov't debt - only that without the FED, the US Gov't would be subject to some severe discipline. And who will finance the next 5 years of projected Trillion-dollar-per-year deficits? Are the Chinese and Japanese suddenly going to find the desire for massive increases in US Treasury debt?
The FED is the Central Planner's dream. Accept it, and you accept the idea that a few guys in a room can manage the optimal interest rate and money amount for the US economy. We know that notion doesn't work for steel, corn or cement - why does anyone believe it works for money?
This is a little deeper than my understanding of economics, which is not insignificant. But I don’t understand why this is worse than China holding all our debt. Isn’t it better if the Fed holds it?
The year before the financial crisis, when the national debt was $9 trillion (Sep 30,2007), the Fed held $780 billion in Treasury debt.
At the end of the fiscal year, Sep 30, 2010, the national debt was $13.5 trillion and the Fed held $809 billion in Treasury debt. It doesn't look like there was much difficulty in borrowing an additional 50% ($4.5 TRILLION) while the Fed bought a net of $29 billion more. $29 billion is about 0.64% of total new debt over those 3 years.
Monetary Masturbation Alert...
See Post 23
$30 billion a month from the $1.11 trillion worth of securities you previously called toxic junk? At that rate, the Fed will get all their money back in only 3 years.
I guess your original claim was wrong.
Get over yourself Timmy if you actually ever read anything correctly (like this article) to begin with before running off at the mouth you might learn something.
Tell me again how 1600 is larger than 1773.
you might learn something.
When I want to learn bad math, you're the first person I'll turn to. Thanks!
Read the whole thing timmy
Which one? The one that proved your claim...
(Soon Fed will hold more than China and Japan Combined)
was wrong?
Or the one that proved your claim...
I know the fed bought a bunch of toxic loans from the foreign banks
was wrong?
Read the whole article timmy another already pointed out what you missed. Your nothing but a fed troll who likes to come on every post and defend them and the banks that supported obama I’m on to you.
I read both articles and they both disprove one of your claims. Thanks.
It's pretty darn close to China and Japan combined.
Yes, it's close but less than. Not more than. Please tell Lori, she's not very good at math.
Great link thanks.
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