Almost everyone is dumping US Govt. treasuries, including Social Security

It’s a pyramid scheme.


Almost everyone is dumping US Govt treasuries, including the Fed.

1) China’s treasury holdings are the lowest since 2008 and down by a whopping $500 billion from the peak in 2013.

2) The biggest holder of USTs: Japan’s appetite to buy USTs is the lowest since the GFC as yields become attractive back in Japan.

3) Saudi Arabia’s treasury holdings are the lowest since 2016

Also one of the biggest sellers of US treasury debt is Social Security.

A look at how Social Security is a ponzi scheme

From 1984 to 2009, Social Security ran a surplus, meaning it collected more in annual revenue than it paid out every year in benefits. That surplus was borrowed and spent by the rest of the government and, in exchange, Social Security got special Treasury bonds it kept in its reserves to redeem in the future.

Since 2010, however, Social Security has been running an annual deficit, meaning it has been collecting less in revenue than it pays out in benefits.

As a result, Social Security redeemed the bonds held in the trust funds to pay out the full benefits. When the federal government repays those bonds, it must borrow from the public to obtain the funds to do so.

Social Security owns about $2.7 trillion in US govt treasury debt. That is gradually being redeemed to pay benefits, forcing the US Treasury to sell more debt on the open markets.

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