Sticking with cartoons for one more post, followers of The Simpsons may remember Richard Texan for such lines as:
– Rich Texan– “Son, I represent a group of oil tycoons who make foolish purchases. We already bought us a stained glass bathrobe and the world’s fattest racehorse. Now we need your ice man.”
From Wolf Street, May 19:
A red-hot question in our iffy times.
The US gross national debt has now reached $30.4 trillion, having spiked by a $7.0 trillion since March 2020. Every one of these Treasury securities had to be bought and is held by some institutional investor, bank, government entity, or individual in the US or globally.
The red-hot question is: Who the heck bought and is holding all these Treasury securities?
Treasury securities have become more attractive this year as yields have risen across the board, but remain woefully below the rate of CPI inflation. Yields have risen because investors demanded higher yields to buy them. If there isn’t enough demand for Treasury securities, then yields rise until there is enough demand. If yields rise enough, I’m a buyer. Yield solves all demand problems.
The Fed, the single largest buyer until early this year, is no longer adding to its holdings. And in June, it will start reducing its holdings, even as the government will issue more debt and someone has to buy it all.
So who is holding this Treasury debt in our increasingly iffy times?....
....MUCH MORE
Oddly enough this is the ad Google decided to show me alongside Mr. Richter's post:
