Uncle Sam Wants You: Treasury Depends More on Domestic Bond Buyers
August 17th, 2018Mmm hmm.
Keep in mind, the Fed can simply monetize the debt, if enough suckers/bond buyers can’t be found. This is similar to check kiting, but since it involves trillions of dollars, they came up with a more innocuous sounding term for the practice: Open Market Operations.
Via: Wall Street Journal:
The U.S. government has been issuing more debt, but it’s not getting more foreign buyers in the door. As a result, U.S. investors have so far financed all of this year’s increase in the federal government’s borrowing.
Foreign holdings of the debt have remained essentially flat, though the government’s borrowing has risen by $500 billion, giving foreign investors the smallest share of U.S. government debt since 2003. Even as yields on Treasury securities have risen to multiyear highs, foreign demand for debt at government bond auctions has slowed to the weakest level since 2008.
