Question: Where does the US Government get virtually all of the money used to buy up Treasury Bills and Bonds?
Answer: The Fed runs printing presses, as needed, to produce worthless fiat currency ... and ... the Bills and Bonds they buy.
The Fed doesn’t have a printing press. But feel free to send me any of that worthless fiat currency you want to get rid of.
Largest holdings of Treasury debt as of June, 2010:
Taiwan: 130 billion
Hong Kong: 138 billion
Caribbean island banks: 160 billion
Brazil: 165 billion
OPEC: 226 billion
Insurance companies: 260 billion
Comm.banks,S&Ls, C.U.s: 274 billion
United Kingdom: 448 billion
State and local gov’ts: 535 billion
Pension funds: 644 billion
Mutual funds: 648 billion
Japan: 837 billion
China: 868 billion
Individuals, GSEs, broker dealers, bank trusts, estates, savings bonds, corporate and non-corporate businesses: , 1,266 billion
Federal Reserve: 5,345 billion