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Russia cuts Treasury holdings in half as foreigners start losing appetite for US debt

sangha

sangha

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[h=1]Russia cuts Treasury holdings in half as foreigners start losing appetite for US debt[/h]
[FONT=&quot]Foreign governments pulled back their purchases of longer-term U.S. debt as trade tensions escalated around the world.[/FONT]
[FONT=&quot]The declines are relatively small so far for notes and bonds — just shy of $5 billion each for March and April, the most recent months for which Treasury data are available — but it signals a potentially troubling trend.[/FONT]
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https://www.cnbc.com/2018/06/18/rus...igners-start-losing-appetite-for-us-debt.html

[FONT=&quot]One of the most glaring declines has come from Russia, which sliced its holdings of U.S. debt nearly in half from March to April, from $96.1 billion to $48.7 billion. Russia's Treasury ownership peaked at $108.7 billion in May 2017.[/FONT][FONT=&quot]In all, foreigners held $6.17 trillion of the total $14.84 trillion of Treasury debt outstanding through April. The national debt including intragovernmental holdings has swelled to more than $21 trillion.[/FONT]
[FONT=&quot]Russia isn't the only country cutting back in its U.S. holdings.[/FONT]
[FONT=&quot]China, the largest owner of U.S. debt, reduced its level by $5.8 billion in April to $1.18 trillion, while Japan, the second largest, cut its holdings by $12.3 billion to $1.03 trillion. Ireland, the U.K. and Switzerland also pulled back.[/FONT]
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This is how it begins. The reluctance of foreign nations to buy our debt means higher interest rates and higher costs to service our debt.
 
sangha said:
https://www.cnbc.com/2018/06/18/rus...igners-start-losing-appetite-for-us-debt.html



This is how it begins. The reluctance of foreign nations to buy our debt means higher interest rates and higher costs to service our debt.
Click to expand...

It was always a matter of when, not if, as the not dim understood when the Boomers decided to finance our lifestyle on the backs of future generations.

They will think poorly of us, on par with how we feel about those who exterminated the Indians and those who trafficked and used African slaves.

We think we are super.

NATCH
 
Hawkeye10 said:
It was always a matter of when, not if, as the not dim understood when the Boomers decided to finance our lifestyle on the backs of future generations.

They will think poorly of us, on par with how we feel about those who exterminated the Indians and those who trafficked and used African slaves.

We think we are super.

NATCH
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Tax cuts and wars are responsible for the debt.
 
Hawkeye10 said:
I am not shocked that you think so.
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Slumped revenue from the financial crash played a large part.

But, it's mainly Bush's tax cuts and wars that we are paying for.
 
Winston said:
Slumped revenue from the financial crash played a large part.

But, it's mainly Bush's tax cuts and wars that we are paying for.
Click to expand...

The debt is programmed to near $150 Trillion when the last Boomer dies, the vast majority of that is because we never paid for Boomer retirements and then we compounded the problem by never fixing the medical system (Obama straight up lied when he claimed he was working on that)....which is super expensive and not very good.

Obama's REALLY BIG IDEA was to make it even more expensive and then too ignore that it is not very good.
 
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The Mark said:
I don't understand this stuff well enough to know if it's even an issue.
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Off Topic:
I applaud you for just saying so. That is a perfectly honorable thing to say.

Would that more people who, like you, don't understand the workings and impacts (their plausibility and probability) refrain from opining on such things?


It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a "dismal science." But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.
-- Murray N. Rothbard​
 
Xelor said:
Off Topic:
I applaud you for just saying so. That is a perfectly honorable thing to say.

Would that more people who, like you, don't understand the workings and impacts (their plausibility and probability) refrain from opining on such things?


It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a "dismal science." But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.
-- Murray N. Rothbard​
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It doesn't help that I've listed to an economist or two say the deficit doesn't matter at all, since we can print as much money as we need to pay it off.

Combined with the more standardized talk of how it's bad, also from economists...
 
The Mark said:
It doesn't help that I've listed to an economist or two say the deficit doesn't matter at all, since we can print as much money as we need to pay it off.

Combined with the more standardized talk of how it's bad, also from economists...
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Not surprising that you remain confused. Economists haven't settled on the the nature and extent to which the deficit matters, though even the most basic understanding of how debt spending works informs one that a country, not even the U.S. can incur so much debt that it cannot make the interest payments on it.

You may find it useful to read about the matter (the debt, not the deficits, which are merely the incremental additions to the debt) rather than listen to economists discuss it. Reading affords one the opportunity to "fully digest" the information.
When reading the above, it's essential to keep in mind (constantly) that money is a medium of exchange and a store of actual value or wealth; thus its value derives from it's being accepted as such and being usable to later exchange it for items/services of value, not because money provides value in and of itself. To wit:
  • $50K provides little to no satisfaction (utility in economics parlance) on its own, but as a medium of exchange whereby one can trade it for "whatever gizmo/service" that does provide some sort of actual utility.
  • By the same token, few "whatever gizmos/services" are durable enough (non-perishable) that the satisfaction they can or do return doesn't diminish over time.
  • There are some durable things one can buy with money -- natural elements and certain compounds. Gold is one such item; however, it doesn't take long to realize that if one has a gold standard rather than fiat currency (credit standard), that at some point, it becomes impossible to increase the supply of the medium of exchange -- gold, silver, platinum, diamonds, etc. -- thus making wealth be literally a zero-sum matter.
  • Why is anything -- money, gold, diamonds, whatever -- a medium of exchange? Because people are willing to allow it to be.
  • The "balancing act" is, as you may imagine, is to allow the quantity of money increase -- because if the quantity of money doesn't increase and the population does, there becomes a really huge problem -- but not to have it increase so rapidly that the value of extant money drops dramatically. Thus money must have the quality of, say, gold, and be, to some degree, scare, and yet it must also be abundant and available.
 
The Mark said:
It doesn't help that I've listed to an economist or two say the deficit doesn't matter at all, since we can print as much money as we need to pay it off.

Combined with the more standardized talk of how it's bad, also from economists...
Click to expand...

Do yourself a favor and skip that garbage on the quantity theory of money.
 
Hawkeye10 said:
It was always a matter of when, not if, as the not dim understood when the Boomers decided to finance our lifestyle on the backs of future generations.

They will think poorly of us, on par with how we feel about those who exterminated the Indians and those who trafficked and used African slaves.

We think we are super.

NATCH
Click to expand...

The 'boomers' did no such thing. Reagan and Bush I finally decided it was time to be Keynesian deficit spenders. (not conservative) It took Clinton economics
to reign it in a little and then Bush II went through $13 trillion ($5 trill in projected surpluses and $8 trill in new borrowing) in tax rate cuts (2) to also finance military hegemony.

Trafficking in slaves has always been an economic winner (profit center) for all history of mankind.

But you correctly refer to what was after all, talking about a species whose first progressivism was to go from cannibalism to slavery.
Quickly reasoned that they'd eat all of those people. Better to whip then into making your food.
 
sangha said:
https://www.cnbc.com/2018/06/18/rus...igners-start-losing-appetite-for-us-debt.html



This is how it begins. The reluctance of foreign nations to buy our debt means higher interest rates and higher costs to service our debt.
Click to expand...
Hmmm....is it is it Putin, Xi and Abe punching the orangatan in the gut, or is it their wanting cash for a trade war? Meanwhile, with Italy doing the slow implode and the US stock market getting nervous, T's are holding their own. I'm more bothered with rates nearly inverting.
 
The Mark said:
It doesn't help that I've listed to an economist or two say the deficit doesn't matter at all, since we can print as much money as we need to pay it off.

Combined with the more standardized talk of how it's bad, also from economists...
Click to expand...

Printing money to pay for deficits works well. Just look at Germany in the 1920's and Zimbabwe

Printing money leads to higher inflation (higher than it otherwise would be). Print to much and you can get hyper inflation. Don't print any and you can see deflation assuming the economy is still growing
 
Lord Tammerlain said:
Printing money to pay for deficits works well. Just look at Germany in the 1920's and Zimbabwe

Printing money leads to higher inflation (higher than it otherwise would be). Print to much and you can get hyper inflation. Don't print any and you can see deflation assuming the economy is still growing
Click to expand...

We printed quite a bit of money in 2008, during QE, and a lot of economists thought we'd be dealing with runaway inflation because of it. Didn't happen.

fredgraph (10).jpg

fredgraph (11).jpg

Inflation was no different than it was pre-2008.

Remember that most of that deficit spending is really going toward buying goods and services, and paying salaries. And our economy has no trouble meeting that new demand. That's the very important difference between normal deficit spending and Zimbabwe - the Zimbabwe economy was heavily damaged, as was Germany's. Spending in excess of your economy's ability to meet demand is what causes inflation, not the mere existence of money itself.
 
Lord Tammerlain said:
Printing money to pay for deficits works well. Just look at Germany in the 1920's and Zimbabwe

Printing money leads to higher inflation (higher than it otherwise would be). Print to much and you can get hyper inflation. Don't print any and you can see deflation assuming the economy is still growing
Click to expand...

JohnfrmClevelan said:
We printed quite a bit of money in 2008, during QE, and a lot of economists thought we'd be dealing with runaway inflation because of it. Didn't happen.

View attachment 67234644

View attachment 67234643

Inflation was no different than it was pre-2008.

Remember that most of that deficit spending is really going toward buying goods and services, and paying salaries. And our economy has no trouble meeting that new demand. That's the very important difference between normal deficit spending and Zimbabwe - the Zimbabwe economy was heavily damaged, as was Germany's. Spending in excess of your economy's ability to meet demand is what causes inflation, not the mere existence of money itself.
Click to expand...

Printing money leads to higher inflation (higher than it otherwise would be)

Without the printing of money deflation would have been very probable
 
Lord Tammerlain said:
Printing money leads to higher inflation (higher than it otherwise would be)

Without the printing of money deflation would have been very probable
Click to expand...

That's not what my data suggests at all. There was no real difference in inflation before and after 2008.

Anyway, deflation is a HUGE problem when it happens. Mild inflation is not.
 
Winston said:
Slumped revenue from the financial crash played a large part.

But, it's mainly Bush's tax cuts and wars that we are paying for.
Click to expand...

We're collecting the same amount of taxes now as before the Bush tax cuts, so thats obviously not the problem.

Overview
The Congressional Budget Office projects that, if current
laws generally remain unchanged, total revenues will rise
by less than 1*percent in 2018, to just over $3.3*trillion.
Revenues are expected to decline as a percentage of gross
domestic product (GDP)—from 17.3*percent in 2017 to
16.6*percent in 2018—below the average of 17.4*percent
of GDP recorded over the past 50*years (see Figure 3-1).
In CBO’s baseline projections, after a further slight
decline in 2019, revenues rise markedly as a share of the
economy, growing to 18.5*percent of GDP by 2028.
Revenues over the past 50*years have been as high as
20.0*percent of GDP (in 2000) and as low as 14.6*percent
(in 2009 and 2010).
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And defense and discretionary spending is way down. So thats not the problem

Capture.JPG

Which leaves entitlements...
 
Pedestrian said:
The 'boomers' did no such thing. Reagan and Bush I finally decided it was time to be Keynesian deficit spenders. (not conservative) It took Clinton economics
to reign it in a little and then Bush II went through $13 trillion ($5 trill in projected surpluses and $8 trill in new borrowing) in tax rate cuts (2) to also finance military hegemony.

Trafficking in slaves has always been an economic winner (profit center) for all history of mankind.

But you correctly refer to what was after all, talking about a species whose first progressivism was to go from cannibalism to slavery.
Quickly reasoned that they'd eat all of those people. Better to whip then into making your food.
Click to expand...

What is this Clinton economics you speak of?
 
JohnfrmClevelan said:
Do yourself a favor and skip that garbage on the quantity theory of money.
Click to expand...

Well far too many still suffer from the 'what I want to believe' mindset...rather than the fact based mindset.

The US has n e v e r ever printed up money. The US will n e v e r print up money.
I guess it is just a far too easy and intellectually vacuous for the uninformed to keep on that even though it thus...serves no argument.

To help everybody's understanding of this charge, printing up money means actually creating new currency, with new serial numbers and entering them into circulation.
Give this some slightly interesting thought. The US has according to 'printing up money' crowd. printed up trillion$. So ok, let's try ONE Trillion in a year.

That's 10 Billion $100 bills in a year. (by the GPO's Bureau of Engraving and Printing) So if we give them time, [they] would need to be pretty fast.

That's over 27 million new bills every day, NOT even close to possible. (over 1.1 million new bills per hour 24/7)

What people too often do, is to think of the evils the-other-side is doing and try to paint a picture of doom and gloom around it.

Pick one, Bush II, Obama, ok even all of them gong back to Reagan...****, Hoover !! NONE presided over a fed or treasury printing up money,
yet partisans try to claim it to try to demonize the govt. at the time, into the position of being the whole problem.

Now even though over the last 40 years, the repubs seem to love spending your children's and your children's children's money, none has
ever 'printed up' [sic] money. That's how and why we call it borrowing...debt and the repubs are determined to party on it for as far as the eye can see.
 
jonny5 said:
What is this Clinton economics you speak of?
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A complete reversal of Reagan's ridiculous supply-side [sic] tax rate cuts policy, (the first 1993 bill of which the repubs unanimously voted against)
a pay-as-go agreement with the house, welfare reform and spending cuts. Resulted in approx. 4% growth in GDP adding 22.7 million jobs.
 
The Mark said:
It doesn't help that I've listed to an economist or two say the deficit doesn't matter at all, since we can print as much money as we need to pay it off.

Combined with the more standardized talk of how it's bad, also from economists...
Click to expand...

we have a few of those people on this site...that say that "debt doesnt matter"

as an accountant by trade, and a guy who has made a living looking at balance sheets....debt DOES matter to me

and yes, as rates go up....our servicing amount is going to increase exponentially

but rates have been historically low for years now....and that hurts the savers....the only place you can invest and gain more than 3% is in the market...i dunno where we go from here....i dont have a crystal ball, and my name isnt Kreskin

every president has inherited debt...some have drastically increased it...

that rainy day many have been talking about for years may be coming around the corner
 
jonny5 said:
We're collecting the same amount of taxes now as before the Bush tax cuts, so thats obviously not the problem.



And defense and discretionary spending is way down. So thats not the problem

View attachment 67234647

Which leaves entitlements...
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Defense spending started down during Bush I the so-called peace dividend. It was reduced further during Clinton and sure enough,
elect a repub and soon back to cutting taxes, not defense. (there goes your surplus) to starting two wars (in come the profiteers and borrowing $8 trillion)

Ah yes, the neocons gave us the 'war on terror' which is now the perpetual gift that keeps on giving as indicated by the following:

Then after reaching $690 billion under Obama, it was pared down a little. But we all know right ? Anything less than say about 50% to 55% of discretionary
we remain very scared and afraid, so spending or oh boy, with Trump, time to party hardy again...we get $700 billion. So no, the defense budget is not going down

AND those so-called entitlements left over, are paid for...the war making and corp. entitlements...are not.

$700 billion is still hey, only $1O0 billion more than TWICE the highest defense spending during the height of the cold war.

America is living in a continuous war time economy and many fully expect that to continue.

Here's the best part blogroids, ok, one of the best parts. Just...JUST those 100 cruise missiles just recently fired into Syria could have built
4 new 600 student middle schools.

No kidding 'debaters' we are going to need a new war soon. We have to keep the gravy train going.
 
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