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Fed Has Bought More U.S. Gov’t Debt Than Treasury Has Issued So Far in 2013

Feb. 7, 2013 8:00pm Becket Adams

Yes, we understand that it’s only February, but this isn’t exactly a good way to start the new year: The Fed has bought more U.S. government debt that Treasury has issued, CNSNews.com reports.

“On Dec. 31, the total debt of the U.S. government was $16.4327 trillion and then-Treasury Secretary Tim Geithner announced that the government had hit what was then the legal debt limit,” the report reads.

“Last week, however, Congress enacted a law to suspend the federal government debt limit until May 18, 2013, and allow the administration to resume increasing the debt,” the report adds.

As of Wednesday afternoon, total federal debt amounted to approximately $16.4 trillion, up $47.2 billion for the calendar year, according to Treasury.

“At the close of business on Jan. 2, the Federal Reserve had owned $1.661 trillion in U.S. Treasury securities. By the close of business on Feb. 6, it owned $1.7172 trillion—an increase of $51.1 billion for the calendar year,” CNSNews notes.

“Thus, the Federal Reserve’s purchases of U.S. government debt in this calendar year have exceeded the Treasury’s net debt issues by about $3.9 billion,” the report adds.

But wait! There’s more: Treasury also announced last week that it’d continue right along with its $45B-per-month purchases of longer-term Treasury securities.

You know what this means, right?

It means that unless something suddenly changes, Treasury will buy up $540 billion in federal debt this year alone.

“The CBO currently estimates that the federal deficit for fiscal 2013 will be $845 billion. If the Fed were to buy debt at a pace of $540 billion a year, and the Treasury were to issue it at $845 billion per year, the Fed would be buying the equivalent of about 64 percent of all debt the government issued,” CNS reminds us.

“As recently as calendar year 2007, the total debt of the United States increased by only about $549 billion, or roughly equal to the amount of debt the Fed plans to buy this year,” the report adds.

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Comments (45)

Mr Sanders
Posted on February 8, 2013 at 5:19pm
Ther’re playing 3-Card Monte.

537 people, less the ones that are standing up and taking a stand against this debt insanity, worthless to the core. The Senate is FINALLY going to offer a hand in to the budget after 5 years – gee…. thanks!? The Presidents proposed budget – I haven’t even seen it on paper, let alone online yet.

Getting them to agree, in principle, on a new color for the standard issue Federal Government toothbrush is like getting the President to admit that we [Big-G] have a spending problem.

Good going little Timmy & Bennie you may go down in history as the children that broke the world…. and placed US all in servitude.

Progressives, blame Bush all you want, but this has been your economy for 4 years now, and you’re the ones that are spending $1T more than we take in each year.

Socialist/Marxist Systems of Finance work until they run out of other people’s money.

Might I suggest something to an entreprenuer…. design a 4-wheeled wheel barrow that can carry a common stack of wrapped bills, I don’t know a palette-size I guess, and keep them vertical as a human runs 5MPH minimum, 15MPH max. Maybe also a wireless receiver or center-mounted IPad so they can keep track of the minute-by-minute changes in the value of their stack relative to inflation?

Just an Idea……

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Big Media Bias
Posted on February 8, 2013 at 12:22pm
Buy ammo. Buy handguns. Buy canned food during deep discount sales. Pay your electricity and heat monthly bills AHEAD as far as you possibly can. Keep your mouth shut. Loose lips sink ships. Good luck. We’re F’d.

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firman
Posted on February 8, 2013 at 12:14pm
When the money the fed is printing hits the markets, inflation kicks in. Then interest rates rise. Real estate values will drop, then the stock market crashes. The economic future isn’t too bright.

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GuruMeditation
Posted on February 8, 2013 at 7:20am
http://traderdannorcini.blogspot.com/

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KidCharlemagne
Posted on February 8, 2013 at 12:03am
Bernanke wasn’t kidding, was he?!:

Bloomberg News (Dec. 3, 2012): “Treasury Scarcity to Grow as Fed Buys 90% of New Bonds”

If this keeps up, then the Fed will eventually own ALL the dollars in the entire world…

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Maxim Crux
Posted on February 7, 2013 at 10:33pm
Really, where is the treasury getting the money to buy anything? The collapse is two months away. That is why you are seeing the super rich dump stock like crazy.

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- Big Media Bias
  Posted on February 8, 2013 at 11:57am
  Gold and silver and other precious metals have not risen significantly. Until the prices jump, where would these super rich put their money? I don’t see any specific foreign currency jumps either.
  
  Report this comment
- marconi314
  Posted on February 8, 2013 at 3:44pm
  Actually, it’s not the US Treasury that is buying up bonds – they are the ones selling to pay for our national debt. It’s the Federal Reserve that is buying up the bonds from the US Treasury to pay for the debt. Basically, our left hand is borrowing from our right hand. Because fewer and fewer foreign countries are interested in purchasing our debt.
  
  Report this comment
MontanaPatriot
Posted on February 7, 2013 at 10:02pm
Bottom line this country cannot continue to spend like this, revenues are not the answer, they will never cover spending. Get out of debt so you can afford to live in the future.

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NigelTufnel
Posted on February 7, 2013 at 9:31pm
Great posts here on this subject. Hard assets will be the only wealth when the sh it hits the fan. I’ve been urging everyone I know since Obama took office to get out of debt. If you’re carrying some on a car or property loan make sure you have enough in the bank to make a quick transfer to pay it off. The fed could stop all bank transactions in the blink of an eye and try to hit some sort of reset button. Of course the big one is your house. Fan and Fred back up 95% of all home mortgages. Not a stretch to seeing the Fed siezing your house and selling it to someone who can pay. The bond bubble is already here.

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- JRook
  Posted on February 8, 2013 at 9:38am
  Ok you do realize that the deficit run rate that Bush Jr. handed the PRESIDENT was $1.2 trillion. So while spending is clearly out of control and revenue is inadequate, the annual deficit is getting smaller. The problem with cutting spending is that the majority of federal spending goes to military contractors, hospitals, physicians, drug companies, IT companies and infrastructure companies. The SS trust fund is still solvent so technically it is not contributing to the debt, just the major creditor to the general fund. Cutting spending dramatically on any of those groups will of course hurt the economy. Thus defines that trap we are in. To personalize it to any particular PRESIDENT is to place ideology over thought, and slander over the truth.
  
  Report this comment
- woodyee
  Posted on February 8, 2013 at 10:00am
  JROOK – How does the deficit get ‘better’, when we can’t even keep up with interest payments?!?
  
  Report this comment
showmerancher
Posted on February 7, 2013 at 9:07pm
How is it that the Fed is having to buy up more bonds than are even being issued? Apparently bond holders are getting worried and divesting themselves before they take big losses, and the Fed ends up becoming the buyer in order to keep interest rates low… Which would mean we better watch out for confidence to erode to the point of people beginning to short bonds, which could mean a big problem could be imminent.

Oops,

Short US Government Bonds ‘Right Now’ says billionaire Jim Rogers…

http://www.cnbc.com/id/100444279

Uh-oh.

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- Dougral Supports Israel
  Posted on February 7, 2013 at 9:37pm
  Bingo, we have a winner! I believe that’s exactly what is happening. The government cannot sell enough bonds to cover it’s borrowing so it sells bonds to itself. If you or I tried something like that to get by, we’d end up in jail. When government does it, it’s considered creative.
  
  Report this comment
thibx
Posted on February 7, 2013 at 8:59pm
i don’t know if he is trying to destroy the country or if he is just plain stupid. we all loose especially bottom and middle.

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- Advection
  Posted on February 7, 2013 at 9:13pm
  He’s stupid, too, but the answer is that he’s trying to destroy the nation. And he’s succeeding.
  
  Report this comment
Independent4233
Posted on February 7, 2013 at 8:52pm
What amazes me is that wages are falling, inflation has ALREADY been zipping upwards at a pretty good pace especially for food, energy, animal feed and gasoline; and, per shadowstats.com, counting people who dropped out of the work force and stopped looking for work, the unemployment rate is roughly 15%; the deficit is about a trillion dollars; the debt is going upward to about 17 trillion dollars now; and the debt to GDP is 203% and climbing, yet the community organizer is concerned with banning guns and has delegaqted his VP to full time on-the-road-campaigning to gain support, while he campaigns on the effort every chance he gets to the exclusion of everything else.

Does anybody get the impression this black geek doesn’t care one whit about the stability of this country’s economic system?

Or is he just too dense to understand the gravity of the situation?

Secession is the ONLY answer. Pull out and let them destroy each other in mob attacks and riots.

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soybomb315_II
Posted on February 7, 2013 at 8:50pm
audit the fed

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- Eastinfection
  Posted on February 7, 2013 at 10:05pm
  not it!
  
  Report this comment
UNALIEN
Posted on February 7, 2013 at 8:23pm
Weimar Germany = Obamas America ..

hyperinflation is coming, the NeoKeynesian Progressive Socialist Marxists can’t continue this debt ponzi wealth confiscation scheme much longer… they are criminals deluded by a suicidal ideology

debt = inflation = theft

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- Fubared
  Posted on February 7, 2013 at 8:45pm
  Plain math says so.
  
  Report this comment
- dublinthewagons
  Posted on February 7, 2013 at 8:48pm
  When do we get to the political hanging’s? Can’t wait
  
  Report this comment
- Keatonc333
  Posted on February 7, 2013 at 9:07pm
  you know.. if you’re going to try and use big words.. at least use them correctly.. this admin. is so far from neo-classical synthesis! you cant even compare the Obama admin to neo-keynesian economics! Also progressive, socialist, and marxist ideologies are all contradictory. and finally. how one creates a debt ponzi confiscation scheme seems impossible! do you even know what a ponzi scheme is? i’m guessing you are trying to compare obamacare to a ponzi scheme. but you are way off the mark! and i would hardly call a modest raise in taxes on those making over 400,000 a confiscation effort! in the future, please use a dictionary before using such apparently challenging words.
  
  Report this comment
- Walkabout
  Posted on February 7, 2013 at 9:34pm
  Poor SendtheMeteors will not be able to retire because his/her retirement account won;t keep pace with inflation. but they will back Obama to the hilt.
  
  Poor deluded fool.
  
  Report this comment
- Walkabout
  Posted on February 7, 2013 at 9:54pm
  Keatonc333
  Also progressive, socialist, and marxist ideologies are contradictory
  ***
  
  No not really . It is like Kinsey’s sliding scale of homosexuality / bisexuality/heterosexuality
  
  http://en.wikipedia.org/wiki/Kinsey_scale
  
  In this scale we have progressive, socialist, and marxist or sick, sicker & sickest.
  
  Maybe you can join the Shining Path Guerillas in Peru. Since Lori Berenson has been released, the guerillas need another know-nothing American, who supports socialism or marxism . An American who believes if we do it right this time we will have utopia.
  
  Or Maybe you can go to the socialist paradise of Sweden. Before you do I would recommend you get sex change & convert to Islam for your own safety. They have a rape epidemic there. Plus the Muslims are restless. You know the G-dd-mn socialists are turning pensioners out of housing to make room for Muslims.
  
  Pat Condell: Sweden, Multiculturalism, censorship and rape
  Remember this Swedish rape victim? The Somali Muslim immigrant
  Afghan Muslim rape “marathon” worst in Sweden’s history
  A Jewish woman lives as a fugitive in her own home in Malmo
  
  Report this comment
- UNALIEN
  Posted on February 7, 2013 at 10:21pm
  KEATONC333
  
  Are you trying to tell me what words to use,,, You Progressives are brainwashed children, can’t you think for yourself, I know exactly what I am talking about and you clowns either live in a deluded sense of reality OR you benefit from Government largesse. It is a DEBT PONZI scheme (new debt created to pay the old) driven by the Collectivist ideologies under the failed and corrupt promotion of Keynesianism..
  
  Keynesianism is the economic cover for the redistribution of wealth from future earners and savers to be spent today. ALL Collectivists (Socialists, Progressives, Marxists, etc) embrace and encourage the Government debt expansion and it ALWAYS causes inflation, and eventually a default, either slow or quick.
  
  The financial system requires an ever expanding debt and devaluation aka inflation, this is theft of wealth from the earners/savers to benefit the asset owners. The amount of debt needed to be “monetized” is unsustainable, no exit, the only path is “print” more and more since the entire economy is supported by it. There is no exit plan for the FED, they will keep “printing” away the debt.
  
  BTW… the elites benefit from debt expansion under the promotion of collectivist paradigms as assets rise, the poor and middle class get robbed via confiscatory inflation. A transfer of wealth from the poor to the wealthy.. Ideological Progressives are promoting a criminal system of extortion FOR the wealthy. Useful idiots.. debt is slavery
  
  Report this comment
dublinthewagons
Posted on February 7, 2013 at 8:23pm
We don’t have a spending problem. Thank goodness. I predict by the end of 2016. The debt and QE printing will be close to $26 trillion.

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- Shasta
  Posted on February 7, 2013 at 8:33pm
  Obama once laughed off the debt saying we owe most of it to ourselves, as if that made it ok.
  
  Report this comment
cdn1979
Posted on February 7, 2013 at 8:22pm
so, the banks get money from the fed on loan and pay back the fed with interest. the government sells bonds to the fed so now they own the fed as well. as the government only has the peoples money it would mean the people owe the fed. banks make interest by lending out money to the people and charge back with interest. so basically, the people owe all the money and fed is collecting all the money. the government is irrelavent here. it’s the fed that is the problem. This is some scary stuff. an unregulated finacial mafia basically owns this country. question is, who runs the fed??? it sure as heck isn’t the government. republican or democrat, they both work for the fed. it’s sad. the government should work for the people.

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- dublinthewagons
  Posted on February 7, 2013 at 8:37pm
  Dont forget the money loans to the banks to buy stock in the stock market keeping the prices high & artificial. This keeps confidence up in the economy, gold prices down and Reid & pelosi can do some insider trading and get filthier rich. While your great great great grandchildren pay it back.
  I forgot the gold we have to buy on the open market to replace the gold our government sold that belonged to Germany, & the Netherlands. We stored it but stole it now the want it back.
  
  Report this comment
am123
Posted on February 7, 2013 at 8:22pm
Inflation is already baked into the cake because of the monopoly money the Fed has already printed. The more funny money they print, the more it dilutes everyone’s cash and the end result is inflation. The dilemma the Fed has is either face civil unrest and riots because the banks have lost everyone’s money, or print money to pacify the masses. They are taking the later alternative. Considering that the more money they print the more worthless everyone’s money becomes, and considering that the printing press is the only arrow left in the quiver of the Fed, everyone should get ready to bring a wheelbarrow full of cash to do your grocery shopping in the not too distant future. Weimar Republic here we come.

Our Babylonian economic system is coming down:

“Standing afar off for the fear of her torment, saying, Alas, alas that great city Babylon, that mighty city! for in one hour is thy judgment come.”
—REVELATION 18: 10

“For in one hour so great riches is come to nought.”
—REVELATION 18:17

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NoMoMrNiceGuy
Posted on February 7, 2013 at 8:18pm
God Bless us al young and old Bob Crachet

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NoMoMrNiceGuy
Posted on February 7, 2013 at 8:17pm
O’Lawdy !

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Small World
Posted on February 7, 2013 at 8:14pm
Get ready for the collapse.

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- gyro
  Posted on February 7, 2013 at 8:22pm
  good coment
  but can I ask who wins in a currency collapse when the bonds are junk
  
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- UNALIEN
  Posted on February 7, 2013 at 8:43pm
  hard asset owners win
  
  Report this comment
- michaelmoron
  Posted on February 7, 2013 at 8:43pm
  The FEDERAL RESERVE is a PRIVATE BANK that trades their NOTES for our Treasury Bonds.
  There is interest attached to these Notes.
  These notes are NOT MONEY.
  Money by definitiion has to be based on a tangible asset, such as silver.
  A 1964 Quarter is REAL MONEY. it is 90% Silver.
  In 1964 it was worth 25 cents. Today it is worth $5.70.
  In 1964 it could buy a gallon of gas. Today it can buy 1.75 gallons
  In 1964 a ONE DOLLAR NOTE could buy 4 gallons of gas. Today that NOTE can buy less than 1/3rd of a Gallon.
  WE ARE GETTING $crewed.
  
  “People who will not turn a shovel of dirt on the project, nor contribute a pound of material, will collect more money, from the United States, than will the people, who supply all the material and do all the work. This is the terrible thing about interest… But here is the point: If the nation can issue a dollar bond, it can also issue a dollar bill. The element that makes the bond good, makes the bill good, also. The difference, between the bond and the bill, is that the bond lets the money-broker collect twice the amount of the bond, and an additional 20%. Whereas the currency, the honest sort, provided by the Constitution, pays nobody, but those, who contribute in some useful way. It is absurd, to say that our country can issue bonds, and cannot issue currency. Both are promises to pay, but one fattens the usurer and the other helps the people.”
  – Thomas Edison
  
  Report this comment
Eastinfection
Posted on February 7, 2013 at 8:06pm
Ouch.. Doing math with imaginary money hurts my head.

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- RJJinGadsden
  Posted on February 7, 2013 at 8:24pm
  EAST, apparently the same people who brought us the new Monopoly cat.
  
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- Eastinfection
  Posted on February 7, 2013 at 8:38pm
  lol RJJ.
  
  I’d take the iron anyday.
  BTW.. have you played any recent versions of Monopoly lately?
  I did with the kids over Xmas…. Holy Crap it’s changed! 2million for passing go. There are trillion dollar bills, etc.. It’s such a demoralizing game to play as an adult.
  
  Report this comment
- Fubared
  Posted on February 7, 2013 at 8:52pm
  Add this in too-nothing like looming currency wars to add to the fix. Silver and lead, silver and lead…
  http://www.cnbc.com/id/100441340
  
  Report this comment
media-bias-steals-elections
Posted on February 7, 2013 at 8:06pm
What in heaven’s name does the Department of Homeland Security need 1.5 BILLION bullets for?

Tell me I am hallucinating?

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- stopprintn
  Posted on February 7, 2013 at 8:22pm
  That’s to protect people, when they pull their wagons full of money to the the store, for a loaf of bread.
  
  Report this comment
- dublinthewagons
  Posted on February 7, 2013 at 8:27pm
  One for you. Two for me. This is too slow call in the drones
  
  Report this comment
- nzkiwi
  Posted on February 7, 2013 at 8:32pm
  Yes, we have all been wondering about that…
  
  Report this comment

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