Fed Treasury Holdings Set to Surpass China - Is That a Contest We Want to Win?

According to Bloomberg,the Federal Reserve and Japanese investors are poised to pass China and become America’s largest creditors following efforts from U.S. policy makers and the Bank of Japan to stimulate growth.

This chart shows the U.S. central bank’s Treasury holdings have risen to a record $821.2 billion, approaching China’s $846.7 billion. The figure for Japan is $821 billion, the most ever. China overtook both the Fed and Japan in 2008 as the communist nation bought dollars to hold down the yuan as a way to aid exporters, funneling the greenbacks into U.S. debt.

101023 Fed About to Become America's Largest Creditor

Does it seem strange to you that we are about to be our own biggest creditor?

Perhaps, as a sovereign nation, it makes sense if you plan on printing money to pay it back.

Economics Doesn't Always Make Sense.

101024 Economist Bum Cartoon - Schorr

Enhanced by Zemanta

Leave a reply

Your email address will not be published. Required fields are marked *