Here is the list of 'Biggest Holders of US Gov't Debt' from cnbc.com. Guess who is the #1 holder of US Government Debt ... US (us, me and you.) Now you know why the Federal Reserve is so reluctant to let its balance sheet be audited. If it reveals exactly how much money it is printing to buy up all the bonds that China, Japan, and others do not want at every bond auction, we will be shocked.
Here is the excerpt from cnbc.com:
1. Federal Reserve and US Intragovernmental Holdings
That’s right, the biggest holder of US government debt is actually inside the United States. The Federal Reserve system of banks and other US intragovernmental holdings account for a stunning $5.127 trillion in US Treasury debt. This is the most recent number available (Sept 2009), and is at an all-time high, rising in every reporting period since 2007. About a decade ago, the total government holdings were "only" $2.5 trillion.
So what will happen when the Fed printing press stop or slow down. You guess it, interest rate for these Treasury bonds has to go up in order to lure those foreign buyers to take them to finance our deficit.
