Not Deflation...

Can you please post more evidence of this 3x number? I am curious to how the credit destruction is being calculated precisely.

 

You're highlighting the problem. Foreign holdings of US Treasuries are ~25% - as foreign holdings are at historical highs this means foreign participation in *current* Treasure auctions is considerably higher than 25%.

This also doesn't take into account all the agency debt which has become de facto sovereign debt with the recent Treasury policies.

Nor does it take into account that foreigners withdrawing from Japanese treasury-equivalents means the end of WPA-like programs, whereas foreign withdrawal from future US treasury participation means no Social Security checks. Much different level of problem...

 

Japan has had low interest rates for decades.... where is the inflation???

1. The boomer demographic cannot be replenished. It's that simple.

2. Those currenctly in their 20a and 30s, firstly can't fill the boomer demographic in terms of numbers and secondly, even if they could they don't have the money. Most are in debt, paying off student loans or medical expenses. Money for stocks? No way.

3. How many Americans are going to make it past 60? No many I'd say, judging by their health. Less people = deflation.

 

No matter how much increased foreign participation there is now does not change the fact that the person I replied to was wrong -- the majority of our debt is not foreign owned and that fact is not going to change any time soon.

 

Foreign Debt purchases have increased 500% in the last 2 years..

 

If you are a retiree with a bond account or a pension/annuity, you would love deflation!

 

Irrelevant.

You stated that the majority of our debt was foreign owned.

It's not, own up already.

 

From my notes,
$4.7 trillion in private hands, $2.4 trillion (51%) is held by foreign investors. Japan holds around $600 billion (24%) and China holds $500 billion (around 20%). U.K., Brazil and the oil exporting countries own about 6%.

 

Nobody cares. His underlying point was fairly accurate and nitpicking isn't going to further the conversation or anyone's understanding.

 

Nice spin there, sparky.

That foreign owned debt, the $2.4T you're referring to, is 25% of the total debt.

The fact remains that the Fed owns $4.8T, 52% of it and the remaining 23% is owned domestically.