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  • How Much Money Has The Treasury Printed To Monetize The Debt? 4 comments
    Aug 10, 2009 10:16 PM
    Printing money?
    By Ranjit

    moneyandblogging.wordpress.com/2009/06/1.../

    ...<snip>....

    The Fed monetizes some of the debt whenever it buys Treasury securities, regardless of whom it buys them from.

    I confess, this is kind of a “Eureka!” moment for me, as I’d heard about twenty years ago that some 10-15% of the national debt is monetized and couldn’t understand just how.  I heard that in a lecture by Nobel Prize-winning economist James Tobin and figured he knew what he was talking about.  He explained it in The Concise Encyclopedia of Economics:

    ‘At year-end 1990, federal debt outstanding was $2,569 billion, of which only 12 percent, or $314 billion, was monetized. That is, the Federal Reserve banks owned $314 billion of claims on the Treasury, against which they had incurred liabilities in currency (Federal Reserve notes) or in deposits convertible into currency on demand.’

    So, then, how much of the national debt is being monetized today?  As Casey Stengel said, you could look it up.  As of 3 June 2009:

    Federal Reserve holdings of U.S. Treasury debt:  $606.2 billion

    U.S. Treasury debt held by the public:  $7.1 trillion

    The Fed’s holdings of Treasuries, divided by the total amount held by the public, equals .085.  So only 8.5% of the current national debt is being monetized, a smaller amount than in 1990.  The possibility that mounting national debt might someday bring pressure on the Fed to monetize a lot more of it should not be dismissed, but to charge that either the government or the Fed is already printing vast sums of money to pay off the debt is mendacious, ignorant, or both.  I’ll leave the last word to my former student who wrote on an exam:

    ‘Monetizing the debt is when the Fed prints money to cover the government’s defecates.’

    ...<snip>....


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Comments (4)
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  • libs stink
    , contributor
    Comments (3) | Send Message
     
    Quantitative easing is a form of financial sophistry verging on economic suicide. Churchill said it best. “A government trying to spend it’s way our of a recession is like a man standing in a bucket trying to pick himself up by the handle.”
    4 Sep 2009, 12:51 PM Reply Like
  • libs stink
    , contributor
    Comments (3) | Send Message
     
    Quantitative easing is a form of financial sophistry verging on economic suicide. Churchill said it best. “A government trying to spend it’s way our of a recession is like a man standing in a bucket trying to pick himself up by the handle.”
    4 Sep 2009, 12:53 PM Reply Like
  • libs stink
    , contributor
    Comments (3) | Send Message
     
    The obama administration is completely out of control. They are foundering with no comprehensive goal- totally out of their depth. Obama himself has no clue concerning the real world requirements of sound government. He is a jumped up community organizer following the dictates of Saul Alinsky and the other racist radicals he surrounds himself with. He has been printing money non-stop since taking office.

     

    This counterfeiting so far has reached into the billions. The fall of the dollar against gold, oil and other commodities and currencies is a direct reflection of the loss of confidence in the US Dollar. What the white homeowners lost in their home values and investments is now being matched or exceeded in the loss of buying power of whatever money they had left. If obama has any plan it is to destroy the American economy and to reduce the white middle class to total dependency on the feds for handouts. If he gets his way with cap and trade and health care he will almost certainly succeed.
    11 Sep 2009, 08:33 PM Reply Like
  • thetruthreigns
    , contributor
    Comment (1) | Send Message
     
    Leys all step back and say we want to learn, instead of we want to say what we have been told by others.

     

    http://1.usa.gov/SvyQtU

     

    do the math, in 2009 the federal reserve massively contracted our economy. The fed is always printing money but when things get bad that printing of money is in the news.

     

    that does not change that the fed owns the u.s. it is a privately owned institution. the people that own the fed own the u.s.

     

    if they choose to contract the economy (like in 2009) we pay for it for years to come.

     

    END THE FED
    1 Oct 2012, 02:29 PM Reply Like
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