Congratulate yourself, your Federal Reserve is not the #1 holder of US debt! It has been a long time since we have been numero uno in a category but now we are. What an accomplishment! Wrong!
We are being sold down the river and we are doing the paddling!
It does not make any sense to us to have the government issue debt and then have the Federal Reserve buy it. Isn't that like you moving the $100 in your left pocket to the right pocket and saying you made $100? We should be selling our bad debt to countries that we want to mess up their finances, not ourselves. The sad part is that the Chinese and Japanese have been reducing their purchases of debt therefore requiring the Fed to buy it. Good ole Uncle Sugar, he will take care of it all!
Add on top of that the amount of debt that we are accumulating. It is scary. As the following post indicates, debt owned by the Fed has gone up by over $1.3 trillion in the past THREE years. We just cannot keep up that trend!
When will the dam break? When will our economy not be able to sustain the debt service? The answer in our mind is simple, when interest rates go up to levels that are needed to get others to purchase our "junk." When that happens, we will be faced the same draconian choices that the Greeks and Spaniards are facing today.
The interest on the debt owned by the Federal Reserve, other countries and institutions has to be paid and unless something is done soon, we will not be able to service our monthly nut. What happens then?
A couple months ago we tongue-in-cheek made the argument that the US give up California to China, the Southwest to Mexico and Washington and Oregon to Japan in lieu of our debt. The rest of us would be stuck with the Fed's part. We still think that might be an acceptable idea. What do you think?
Whether it is ideas like the above or something else, we must take action and it should be sooner rather than later.
Conservative Tom
We are being sold down the river and we are doing the paddling!
It does not make any sense to us to have the government issue debt and then have the Federal Reserve buy it. Isn't that like you moving the $100 in your left pocket to the right pocket and saying you made $100? We should be selling our bad debt to countries that we want to mess up their finances, not ourselves. The sad part is that the Chinese and Japanese have been reducing their purchases of debt therefore requiring the Fed to buy it. Good ole Uncle Sugar, he will take care of it all!
Add on top of that the amount of debt that we are accumulating. It is scary. As the following post indicates, debt owned by the Fed has gone up by over $1.3 trillion in the past THREE years. We just cannot keep up that trend!
When will the dam break? When will our economy not be able to sustain the debt service? The answer in our mind is simple, when interest rates go up to levels that are needed to get others to purchase our "junk." When that happens, we will be faced the same draconian choices that the Greeks and Spaniards are facing today.
The interest on the debt owned by the Federal Reserve, other countries and institutions has to be paid and unless something is done soon, we will not be able to service our monthly nut. What happens then?
A couple months ago we tongue-in-cheek made the argument that the US give up California to China, the Southwest to Mexico and Washington and Oregon to Japan in lieu of our debt. The rest of us would be stuck with the Fed's part. We still think that might be an acceptable idea. What do you think?
Whether it is ideas like the above or something else, we must take action and it should be sooner rather than later.
Conservative Tom
Top Customer: Under Obama, Fed’s Holdings of U.S. Debt Have Jumped 452%
(CNSNews.com) - Since President Barack Obama was inaugurated in January 2009, the Federal Reserve’s holdings of U.S. government debt have quintupled, according to the Fed’s official monthly balance sheet.
On Jan. 28, 2009, a week after Obama’s nomination, the Fed owned $302 billion in U.S. Treasury securities. On April 25, 2012, the latest date reported, the Fed owned five and a half time that much in U.S. Treasury securities--$1.668 trillion.
That is an increase from January 2009 of $1.366 trillion—or 452 percent.
Under Obama, the Federal Reserve has become the single largest owner of U.S. government debt. When Obama entered office, entities in the People’s Republic of China were the largest holders, followed by entities in Japan. At the end of January 2009, China owned $739.6 billion in U.S. government debt and Japan owned $634.8 billion.
By the end of March 2012, China’s holdings of U.S. debt had grown to$1.1699 trillion and Japan’s holdings had grown to $1.083 trillion.
Together, the Federal Reserve, China and Japan had increased their holdings of U.S. debt by $2.2445 trillion since Obama took office.
The total U.S. government debt grew from $10.6179 trillion to $15.6233 between Jan. 28, 2009 and April 25, 2012. Leaving out the intragovernmental debt—which the federal government owes itself—the publicly owned part of the U.S. government debt has climbed from $6.2955 trillion to $10.8607 trillion, an increase of $4.5652 trillion.
The $2.2445 trillion of that new publicly owned U.S. government debt that was purchased by the Fed, China and Japan equals 49 percent of all the new debt the U.S. government has sold to the public since Obama took office.
Again, all this but not a word about Wall Street. The reason the Federal Reserve is buying all these T-Bills is because they are saving the Wall Street banks from going under on their derivatives losses. Come on, Tom. Let's pin the tail on the donkey! The European central bank will be doing exactly the same thing to rescue the big banks in Spain who lost in the 2008 financial crisis. I'd say "vote Ron Paul", but it's a little late now.
ReplyDelete--David