Skip to comments.Federal Reserve holds $2 trillion in U.S. debt
Posted on 08/20/2013 7:56:29 AM PDT by Prospero
The Federal Reserves holdings of publicly traded U.S. Treasury securitiesfederal government debtpushed above $2 trillion for the first time last week, hitting approximately $2,001,093,000,000 as of Aug. 14, according to the Feds latest weekly accounting.
The Feds 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 Feds holdings of U.S. government debt have more than quadrupled
(Excerpt) Read more at cnsnews.com ...
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?
What could go wrong?
What could go wrong?
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.
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.
We are bankrupt.
This is just Kabuki theater courtesy of the Fed to cover up that fact.
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?
So the Fed must get the interest from the bonds. What does it do with the money? Return it to Treasury?
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
buy more bonds.
Eat it fed... yum yum... would you like some obama with your greens?
Anyone want to buy some tulips?
"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.
Are these $2T in T-Bills and QE dollars one in the same?
Holy sh*t. I don’t know if we even make it to the 2014 elections.
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.
It’s more like 200 trillion when you factor in future liabilities. Invest in guillotines.
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.
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.
The Fed doesn't buy, doesn't want real estate. They buy bonds.
Can you say...Unnngh?
What America needs now, is industry.
Bring back our industry now. Stop buying everything from everywhere.
Buy things made in America.
Why the low QE? We’re credit starved. 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...
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.
Is that percentage of holdings to the publicly held debt or the entire debt?
Yup, not an issue.
Until they can’t make the interest payment for whatever reason.
Then it’s over.
Yup, not an issue. Until they cant make the interest payment for whatever reason. Then its 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.
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|
-- and Federal Debt Held by Federal Reserve Banks 2013:Q1: 1,796.0 Billions of Dollars.
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.
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.