Who owns the National Debt in the US?

Who owns the National Debt in the US?

Who owns most of the US debt?  Is it China? Is it Japan? Is it the Middle East?

No. You may be surprise it is primarily owned by the US Federal Reserve, 50% ownership and heading to 60%. Yes the federal bank of the US, that quasi government-private corporation whom is chartered with protecting and maintaining the stability of the US monetary system, financial institutions, and the economy (maximum US employment, stable prices, and moderate long-term interest rates).  

Estimated ownership of US Treasury securities by general category as of June 2008.

Of the portion owned by foreign countries, who are the major foreign countries holding US Treasury securities?

The share of the foreign holders of United States Treasury Securities as of September 2009.

Of the foreign countries holding US Treasury Securities China and Japan are the largest holders.

Read these quotes and ask yourself -What is Americas fate? Which will it be?

Our national debt, after all, is an internal debt, owed not only by the nation but to the nation. If our children have to pay the interest they will pay that interest to themselves
. Franklin D. Roosevelt

Debt is the fatal disease of republics, the first thing and the mightiest to undermine governments and corrupt the people. Wendell Phillips 

How about We the People and our Representatives all start living by this principle: Never spend your money before you have it. Thomas Jefferson

Federal Reserve it is time to stop the fiscal policy of  “free money” and “over extended credit.”

MG

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Source for Charts: Wikipedia – See Page

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2 Comments

  1. So this means that half of the nations’ debt is in fact backed by debt. This sounds remarkably like a ‘ponzi scheme’.

  2. What specifically was the process by which the Fed acquired the Treasury securities, especially those
    associated with securities issued by the Treasury to borrow funds for deficit spending?

    My understanding is that when the banks created the loan in acceptance of the securities, a loan account was created at a bank, and money was created and put into this account. When a check was drawn from this account equal to the principal of the security and sent to the Treasury in return for the security, the bank’s reserves were diminished by an equal amount. Because the bank is required to hold a minimum amount in its reserves in order to lend, this greatly diminished the amount it could further lend. So, the bank may have sought loans from other banks. But failing that, the bank goes to the Fed and asks to borrow reserves from the Fed to bring its reserves up to the previous level. The Fed accommodates by using a few keystrokes to increase the bank’s reserves to the prescribed level. This is equivalent to creating money out of nothing. As collateral for the loan the Fed acquires the securities.

    At this point is there still a loan in effect from the bank to the United States via the Treasury? Is holding the security as collateral different from owning the security? Does the Treasury have to default in order for the Fed to own the security?
    Does the bank get to keep the increase in its reserves, or are these returned to the Fed. Can the Treasury default on its loan, since the Constitution requires all debts of the United States to be paid.

    Or does the bank put the securities back up for sale at public auction and the Fed buys them with money it creates out of thin air? This is an outright purchase. The bank now has its money for the loan and the Fed has the securities. If this happens then the Fed has redeemed the loan since it is an agency of the Federal government and it purchases the securities with money created out of nothing, a power of the government granted via Congress in the Constitution.
    So government borrows and government redeems the loan. There should be no debt here.

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