by Wolf Richter, Wolf Street:
The share of T-bills outstanding, average interest rate paid on the debt, and cash in the Government Checking Account (TGA).
Today, the US national debt jumped by another $61 billion and thereby made it over the $36-trillion mark, to $36.03 trillion, only four months after it had made it over the $35-trillion mark (July 26), and 11 months after it had made if over the $34-trillion mark (December 29), according to data from the Treasury Department today. Trillions are flying by so fast they’re hard to see.
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So far this year, the national debt has ballooned by $2 trillion, despite GDP growth that has been well above the 15-year average. That’s the astounding thing, that the government has been racking up these huge debts despite the strongly growing economy. No one wants to even imagine how this debt would balloon if there’s ever a recession with falling tax receipts and surging outlays. It’s just nuts to have this during the good times (flat spots = Congressional debt-ceiling charades):
Debt “Held by the public.”
Of that $36.03 trillion in Treasury securities, $28.69 trillion are “held by the public” in accounts in the US and around the world, in brokerage accounts, by banks, by insurance companies, at financial centers, by central banks, by the Fed, etc., and these securities can be traded in the market.
The remaining $7.34 trillion of the debt are held in federal government pension funds, the Social Security Trust Fund, and other “internal” government accounts, and they’re not traded.
It’s that $28.69 trillion that the government must find buyers for, even as the Fed has been unloading its Treasury holdings as part of QT, having by now gotten rid of $1.43 trillion in Treasury securities.
Investors are enticed to buy Treasury securities because of the yield, and if they lose interest and stop buying, the yield rises until more investors find it appealing and buy. So there will always be demand for US Treasury securities, but the yield may be higher, which eventually becomes a problem for the government because it has to pay the interest.
Foreign investors backed up their trucks and loaded up.
In September, all foreign investors combined (red in the chart below) added $170 billion to their holdings of US Treasury securities – well over half of that increase was by the Euro Area – bringing their holdings to a record $8.67 trillion.
Over the past 12 months, they increased their holdings by $880 billion, or by 15.4%! China and Japan, which have been shedding their holdings, have been replaced by eager buyers in Europe, the UK, India, Canada, Taiwan, in financial centers, etc. (detailed discussion and charts by country here):
