Who Will Buy America’s Debt Now?

US government debt: $31.3tn, with $12tn owned by US private investors, $6tn by the Fed, $7tn by US agencies/trusts, $7tn by foreign holders.

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Regulators forced banks to hold US government debt after the financial crisis, but rising interest rates caused massive losses.

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Fed owns $8.4T of US debt, including $6T of US gov debt and $2.4T of GSE debt, causing over $1T in unrealized losses.

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Federal Reserve's capital deficiency is treated as an asset. If the bank incurs a loss, it accumulates a "deferred asset."

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Federal Reserve's large share of outstanding debt could hurt credibility. Private investors might question the bond prices' legitimacy.

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BOJ owns over half of JGBs, its balance sheet exceeds 120% of Japan's GDP, resulting in a lack of trading.

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Central banks must consider market domination, credibility, and liquidity of bonds. Social Security Trust Fund holds $3tn of US debt.

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Foreign investors hold $7.4T of US government debt, accounting for 23.6%. Each official and private account held $3.7T.

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