Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Federal Reserve holds $2 trillion in U.S. debt
cnsnews.com ^ | August 19, 2013 | Terence P. Jeffrey

Posted on 08/20/2013 7:56:29 AM PDT by Prospero

The Federal Reserve’s holdings of publicly traded U.S. Treasury securities—federal government debt—pushed above $2 trillion for the first time last week, hitting approximately $2,001,093,000,000 as of Aug. 14, according to the Fed’s latest weekly accounting.

The Fed’s accounting for the previous week showed that it had owned approximately $1,993,375,000,000 in U.S. Treasury securities as of Aug. 7.

Back on Dec. 31, 2008, before the Fed began its strategy of “Quantitative Easing," the Fed owned only $475.9 billion in U.S. Treasury securities. Since then, the Fed’s holdings of U.S. government debt have more than quadrupled

(Excerpt) Read more at cnsnews.com ...


TOPICS: Business/Economy; Constitution/Conservatism; Government; News/Current Events
KEYWORDS: debt; fed; federal; reserve; usdebt
"Hat Tip" Reason 24/7 Newsfeed
1 posted on 08/20/2013 7:56:29 AM PDT by Prospero
[ Post Reply | Private Reply | View Replies]

To: Prospero

Actually I’m surprised. I would have assumed that the Fed was buying up most of the $5 or $6 trillion or so that Obama has stuck us with. Who else could buy up that much U.S. debt?


2 posted on 08/20/2013 7:58:34 AM PDT by InterceptPoint
[ Post Reply | Private Reply | To 1 | View Replies]

To: Prospero

What could go wrong?


3 posted on 08/20/2013 7:59:36 AM PDT by woodenickel
[ Post Reply | Private Reply | To 1 | View Replies]

To: Prospero

What could go wrong?


4 posted on 08/20/2013 7:59:36 AM PDT by woodenickel
[ Post Reply | Private Reply | To 1 | View Replies]

To: Prospero

The greatest Ponzi scheme in the annals of recorded human history. This is nothing more than a shell game. The Fed is acting like the water pumps on the Titanic. It can buy a little time perhaps. But the truth is the nation is already effectively bankrupt, drowning in an ocean of insurmountable debt. The Fed is simply covering up the true size of this mind boggling debt.


5 posted on 08/20/2013 8:01:02 AM PDT by Trapped Behind Enemy Lines
[ Post Reply | Private Reply | To 1 | View Replies]

To: Prospero

With Quantitative Easing (QE) the Fed just converts this debt into money and injects this into the economy. This in effect is no different than some banana republic just printing money that is increasingly worthless. The result thanks to Obama and the Fed we have trillions in new debt and through QE an eroding US dollar.


6 posted on 08/20/2013 8:07:28 AM PDT by The Great RJ
[ Post Reply | Private Reply | To 1 | View Replies]

To: Prospero

Sheer madness.


7 posted on 08/20/2013 8:16:38 AM PDT by headstamp 2 (What would Scooby do?)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Prospero

We are bankrupt.

This is just Kabuki theater courtesy of the Fed to cover up that fact.


8 posted on 08/20/2013 8:18:30 AM PDT by headstamp 2 (What would Scooby do?)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Prospero

Since the US has reached its lawful borrowing limit, how is it possible for the privately-held Fed to emit debt on behalf of American taxpayers?


9 posted on 08/20/2013 8:19:27 AM PDT by Sgt_Schultze (A half-truth is a complete lie)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Trapped Behind Enemy Lines

So the Fed must get the interest from the bonds. What does it do with the money? Return it to Treasury?


10 posted on 08/20/2013 8:22:04 AM PDT by kabar
[ Post Reply | Private Reply | To 5 | View Replies]

To: Prospero

so...

the national debt doesn’t increase for 3+ months...

because the fed is ‘buying’ the debt by printing as much as they need.

yea, that’s just brilliant
/sarc


11 posted on 08/20/2013 8:23:42 AM PDT by sten (fighting tyranny never goes out of style)
[ Post Reply | Private Reply | To 1 | View Replies]

To: kabar

buy more bonds.


12 posted on 08/20/2013 8:26:12 AM PDT by Trapped Behind Enemy Lines
[ Post Reply | Private Reply | To 10 | View Replies]

To: Prospero

Eat it fed... yum yum... would you like some obama with your greens?


13 posted on 08/20/2013 8:36:02 AM PDT by LibLieSlayer (FROM MY COLD, DEAD HANDS!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Prospero

Anyone want to buy some tulips?


14 posted on 08/20/2013 8:40:02 AM PDT by Prospero (Si Deus trucido mihi, ego etiam fides Deus.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Trapped Behind Enemy Lines
They don't need the money to buy bonds. They can print it. The money is returned to the Treasury after paying for expenses. From the Fed website:

"Does the Federal Reserve operate using tax dollars?

The Federal Reserve's income is derived primarily from the interest on U.S. government securities that it has acquired through open market operations. Other sources of income are the interest on foreign currency investments held by the System; fees received for services provided to depository institutions, such as check clearing, funds transfers and automated clearinghouse operations; and interest on loans to depository institutions (the rate on which is the so-called discount rate). After paying its expenses, the Federal Reserve turns the rest of its earnings over to the U.S. Treasury.

15 posted on 08/20/2013 8:41:07 AM PDT by kabar
[ Post Reply | Private Reply | To 12 | View Replies]

To: Prospero

Are these $2T in T-Bills and QE dollars one in the same?


16 posted on 08/20/2013 8:45:50 AM PDT by IamConservative (The soul of my lifes journey is Liberty!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Prospero

Holy sh*t. I don’t know if we even make it to the 2014 elections.


17 posted on 08/20/2013 8:47:31 AM PDT by Lazamataz (Early 2009 to 7/21/2013 - RIP my little girl Cathy. You were the best cat ever. You will be missed.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Prospero

When this all crashes, the Federal Reserve (which is a group of banks) will own and possess all of our gold and a huge amount of real estate.

This is exactly how banks have prospered through the ages; loan money to countries until they overextend and collapse, then take possession of all the securities.

Oh yes, I forgot. Throw the inevitable war into this mix.


18 posted on 08/20/2013 8:51:36 AM PDT by DakotaGator (Weep for the lost Republic! And keep your powder dry!!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Prospero

It’s more like 200 trillion when you factor in future liabilities. Invest in guillotines.


19 posted on 08/20/2013 10:00:31 AM PDT by VRWC For Truth (Roberts has perverted the Constitution)
[ Post Reply | Private Reply | To 1 | View Replies]

To: kabar
...the Fed must get the interest from the bonds...

Actually they don't, that's not how the bond market works. 

They spent say, $2T for a stack of bonds with a total value at maturity of say, $2.2T.  The 200B profit is what they might eventually get instead of interest.  Or not.  If the plan is to raise interest rates when sell-time comes around, they may want to sell the bonds at a loss as a way to kick rates higher.

fwiw, right now the fed's holdings is ten percent total federal debt.  That's the same percent when Reagan was president.  So much for QE money printing.

20 posted on 08/20/2013 10:13:47 AM PDT by expat_panama
[ Post Reply | Private Reply | To 10 | View Replies]

To: The Great RJ
This in effect is no different than some banana republic just printing money that is increasingly worthless.

It is different. When a banana republic prints money, they spend it into the economy. Backed by nothing. Prices skyrocket. Central bank prints more.

The Fed prints money and uses it to buy guaranteed bonds. The money is backed by the bonds. And a few hundred billion in gold.

If prices start to climb, the Fed can sell the bonds,lend the bonds out, for cash, (reverse repo) or let the bonds mature, all of which would reduce the money supply.

21 posted on 08/20/2013 7:05:59 PM PDT by Toddsterpatriot (Science is hard. Harder if you're stupid.)
[ Post Reply | Private Reply | To 6 | View Replies]

To: DakotaGator
When this all crashes, the Federal Reserve (which is a group of banks) will own and possess all of our gold and a huge amount of real estate.

The Fed doesn't buy, doesn't want real estate. They buy bonds.

22 posted on 08/20/2013 7:07:22 PM PDT by Toddsterpatriot (Science is hard. Harder if you're stupid.)
[ Post Reply | Private Reply | To 18 | View Replies]

Shutdown the Fed...and we'll see where the economy is REALLY at.

Can you say...Unnngh?

23 posted on 08/20/2013 7:15:53 PM PDT by RckyRaCoCo (Shall Not Be Infringed)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Prospero

What America needs now, is industry.

American industry.

Bring back our industry now. Stop buying everything from everywhere.

Buy things made in America.

Now.


24 posted on 08/20/2013 7:19:25 PM PDT by Cringing Negativism Network
[ Post Reply | Private Reply | To 1 | View Replies]

To: expat_panama

Why the low QE? We’re credit starved. Someone said they’re trying to keep a 1.3/1 parity with the Euro.


25 posted on 08/20/2013 7:52:33 PM PDT by 1010RD (First, Do No Harm)
[ Post Reply | Private Reply | To 20 | View Replies]

To: 1010RD
Someone said they’re trying to keep a 1.3/1 parity with the Euro.

People say all sorts of stuff, just like the goofy article that started this thread, but the fact remains that the Fed doesn't care about exchange rates and the Fed doesn't have anything to do with the national debt.  The Fed only works with monetary policy, period.  All this talk we're hearing about QE supporting Obama and wallstreet is nonsense --the Fed's treasury holdings as a % total debt is about average.  Sure, it looks big in absolute terms--

--but as a % total debt--

-- it's not an issue...

26 posted on 08/21/2013 4:09:02 AM PDT by expat_panama
[ Post Reply | Private Reply | To 25 | View Replies]

To: kabar

One of the things to remember is that there used to be bank clearing houses doing essentially the same thing the Fed does today. The Fed eliminated them in favor of a political entity.


27 posted on 08/22/2013 6:00:15 PM PDT by 1010RD (First, Do No Harm)
[ Post Reply | Private Reply | To 15 | View Replies]

To: expat_panama

Is that percentage of holdings to the publicly held debt or the entire debt?


28 posted on 08/22/2013 7:01:28 PM PDT by kabar
[ Post Reply | Private Reply | To 26 | View Replies]

To: expat_panama

Yup, not an issue.

Until they can’t make the interest payment for whatever reason.
Then it’s over.


29 posted on 08/22/2013 7:56:25 PM PDT by ctdonath2 (Making good people helpless doesn't make bad people harmless.)
[ Post Reply | Private Reply | To 26 | View Replies]

To: ctdonath2
--the Fed's treasury holdings as a % total debt is about average.  Sure, it looks big in absolute terms-- --but as a % total debt-- -- it's not an issue...

Yup, not an issue.  Until they can’t make the interest payment for whatever reason.  Then it’s over.

Who is the Fed supposed to make an interest payment to, and why?  Look, say what you want about your worries about $2T in Fed holdings but my concern is the $16T in federal debt.

30 posted on 08/23/2013 5:36:54 AM PDT by expat_panama
[ Post Reply | Private Reply | To 29 | View Replies]

To: kabar
Is that percentage of holdings to the publicly held debt or the entire debt?

Here are a couple links that I like to use: Debt to the Penny --

Current Debt Held by the Public Intragovernmental Holdings Total Public Debt Outstanding
08/21/2013 11,950,216,351,494.50 4,788,205,758,940.44 16,738,422,110,434.94

-- and Federal Debt Held by Federal Reserve Banks 2013:Q1: 1,796.0 Billions of Dollars.

31 posted on 08/23/2013 5:45:44 AM PDT by expat_panama
[ Post Reply | Private Reply | To 28 | View Replies]

To: expat_panama

That’s what I meant. If the government can’t make interest payment in real currency on $16T debt, it doesn’t matter what the Fed issues.


32 posted on 08/23/2013 8:00:53 AM PDT by ctdonath2 (Making good people helpless doesn't make bad people harmless.)
[ Post Reply | Private Reply | To 30 | View Replies]

To: ctdonath2
Ah thanks for clarifying things get foggy before finishing my morning coffee. 

You're absolutely right, the problem's the national debt and not what's being held by the Federal Reserve.  I'm hoping more and more people catch on to what you're saying about the interest rates.  A year or two ago when T-bill rates were 0.15% the interest payments were 'only' $¼T/year, no more than they were in '06.  Problem is that back then T-bill interest was over 5%.  As rates go back up we could be paying more on interest than or any other spending.

Tax hikes would only make revenue fall more; the choice will be immediate and clear: cut spending or watch America go Greece.

33 posted on 08/23/2013 8:42:34 AM PDT by expat_panama
[ Post Reply | Private Reply | To 32 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson