Friday, February 21, 2014

Latest report on the holders of the US National Debt is out. Nice graphic showing the recent historical trend and who the buyers of our IOU's are.

Here is a graph (from HERE) of the latest report from the US Treasury (December 2013) on the various holders of the Public portion of the National Debt. That total is about $12.2 Trillion dollars.

The National Debt is divided up into two categories: Private and Public.  The Private portion of the National Debt is comprised of borrowing from various government Trust Funds and is about $5 trillion dollars, give or take a few hundred billion. The Public portion comes from sources outside the government and includes the US Federal Reserve Bank.

In the chart, just for reference, I highlighted the time period of the recession.  On the right I highlighted the owners of the debt and the percent that dollar amount is of the whole.

Some people are concerned about the amount of debt we owe to the foreign sector "Private Foreign plus Official Foreign"), a total of 47%.  Foreigners might stop lending to us or blackmail us by dumping the debt on the open market.

No problem. The Federal Reserve stands ready to fill the void if there is any shortfall.
The Fed bought a net $543 billion of Treasuries during 2013. That was not a record acmount — in 2011 it had purchased $656 billion — but it enabled to Fed to finance 71 percent of the net Treasury borrowing during the year. That was the highest proportion since the government resumed running deficits in 2002. The 2011 purchases amounted to 61 percent of the money the government borrowed that year.
I don't know if the Fed is a lender of last resort, first resort or somewhere in-between.  They are involved in a substantial way that they were not prior to the recession OR during it!  You can see they did not get involved in a big way until mid-2010.

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