Big Demand for US Treasury Securities

People worldwide are buying as many as the US is willing to create.



And what does this tell us…?

We ain’t going broke, even though that’s what conservative economic principles teach.



We’re paying too high an interest rate maybe?

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Collecting a higher interest rate from the rest of the world is fine. But we should be using the money to invest in this country, rather than “investments” in war and ethnic cleansing abroad.



Yeah. I was thinking it might say two things. One solid and one less solid

  1. The solid thing. USA is still the place to be and nobody out there is really worried about the economy. If they’re buying what you’re selling, that’s a good thing.

  2. The less-solid thing. If you read too many investment forums and columns written by investment/retirement gurus you could read it as saying everybody out there sees yet another stock market crash from which no one will be safe and therefor — flight to safety.


I will add a third to FCorelli’s excellent two:

Worldwide govs and investors are doing “flight to safety” with US dollar as the world looks more crazy, less certain, world trade system is mashed up, China leads coming demographic screw-ups in Germany etc, and with borh GCC and increasing tendencies to war reversing Pinkerist style Optimism.

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Well, it’'s nice to know the rest of the world is giving us such a vote of confidence in spite of, what I’ll call, near-future possibilities.

Pinkerist style Optimism. Are you referring to Stephen Pinker?

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OK, some really silly questions.

Foreign countries are sending their excess dollars back to us in exchange for Treasury notes. Could this be one of the reasons our debt looks so high? And is it really debt? I mean, we are holding on to their dollars. Give us the note back and we’ll send back your dollars (plus some interest, less the inflation hit).

And what is the Treasury doing with these dollars while they hold them? Spend them like drunken sailers (very bad), doing nothing (bad), or do they invest them (smart)?


I’m not sure, but I also know the problem is not as simple as some make it out to be.

Being a world reserve currency seems to come with some “issues”. One of them being you practically need to run trade deficits (like we have for a long time). That means your trading partners end up getting a lot of your currency, and they need to do something with it. Often, that means simply sending it back to us in exchange for our bonds. Also, US Bonds are just a good place to park any currency reserves a country wants to have because they are safe and very liquid, world-wide. But in a way, yes, it does inflate our debt because we owe that money back to the foreign countries who bought our bonds with the currency we sent them to buy the products they are exporting to us.

If we were not a reserve currency I wonder how many of these problems we would have? On the other hand it does come with advantages which is why the rest of the world often says we are taking advantage of our position as a reserve currency. But the details in all that I’ve never understood.

But, most of our debt is owed to our own citizens. And that also makes me wonder, if we paid more in taxes along the way would we be borrowing as much from our own citizens?


There’d be an economic renaissance in America if we brought the wealthy up to the tax rate paid by nurses, teachers and firefighters. I’ve been marveling at my largely zero tax rate as an idle, able-bodied early retiree living off an investment portfolio for 30 years. I don’t know what conservative folks in rural areas are thinking when they support these kinds of policies, but I’m willing to take advantage of the innumeracy.



Yes! I respect and even love Pinker (mostly for his brilliant works on language), but I take him with grains of salt on the future. I think it is perfectly possible that the last eighty years of an approximate world civilization were a fluke, and that idiot epidemics, slaughters, and wars will get leveraged off GCC.

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Looking at income taxes paid The Fool tells us that the average someone making just under $100K paid $7.4K, while for just under $1,000K that was $156K. Simple math indicates an average rate twice as high for the higher incomes.


Well, maybe you didn’t go far enough up the food chain.

In 2007, Jeff Bezos, then a multibillionaire and now the world’s richest man, did not pay a penny in federal income taxes. He achieved the feat again in 2011. In 2018, Tesla founder Elon Musk, the second-richest person in the world, also paid no federal income taxes.

Michael Bloomberg managed to do the same in recent years. Billionaire investor Carl Icahn did it twice. George Soros paid no federal income tax three years in a row.

And let’s not forget large profitable corporations.

In fact, at least 55 of the largest corporations in America paid no federal corporate income taxes on their 2020 profits, according to the Institute on Taxation and Economic Policy. The companies include names like Whirlpool, FedEx, Nike, HP and Salesforce.

Something is rotten in the state of Denmark.

And right here at home.


Well, if your income was just under $10,000K the average tax paid was $1,872K.

Income    Tax       Percentage
$100K      $     7      7.4%
$1,000K    $  156K     15.6
$10,000K   $1,872K     18.7


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One of the few things that has broad bipartisan support:

Tax the Rich Is Actually a Popular Bipartisan Stance, Poll Shows

Of course, the devil is in the details.


Of course it is a popular bipartisan stance. Everybody wants taxes to come from someone else.


We are in a new day economically.

Not really. It was not too long ago that such populism was largely absent from at least one major political party. Now, majorities in both parties feel this way.

I think the shifting political landscape as well as the growing and massive disparity (probably not seen since prior to the New Deal) has really moved the needle.


Well, there’s a huge appetite for US Treasury securities right now.