School is in. Who owns America's Debt.

http://www.abandonthecube.com/blog/w...egory_0608.jpg
Here is a more or less accurate chart of who owns US debt. Basicly half owned by the federal reserve. In fact the fed has pretty much bought every treasury that has been sold in the past four years to get to this ratio. Implicit to the feds promise to keep interest rates at zero is the that they will buy treasuries at 1 % yield. Pretty much no one else is a buyer at 1% yield. China is a net seller of treasuries. Japan continues to buy trashuries with their own debt to gdp of 200%. If the trend continues the fed and japan will own all of our treasuries.

This raises a interesting question. If the US goverment can fund its spending with half of it being bought by the fed with money from the electronic press and the other half from revenues (taxes) why are taxes needed at all? If the fed can print half of what the goverment spends, why cant they print it all?

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Originally Posted by xring

If the trend continues the fed and japan will own all of our treasuries.

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If you owe the bank $5,000, they own you. If you owe the bank $5,000,000, you own the bank.

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Originally Posted by xring

why are taxes needed at all? If the fed can print half of what the goverment spends, why cant they print it all?

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Control.
Control a man's finances and you have a huge amount of control over the man. If they can't get you with anything else they can always send the IRS after you.

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Originally Posted by mutt

Quote:

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Originally Posted by xring

why are taxes needed at all? If the fed can print half of what the goverment spends, why cant they print it all?

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Control.
Control a man's finances and you have a huge amount of control over the man. If they can't get you with anything else they can always send the IRS after you.

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Additionally it would cause the Ponzi Scheme that is fiat currency to collapse at a much faster rate.

Its taken a century of fiat currency to get us to where we are ... and if we'd just slightly improve our fiscal responsibility and reduce regulation at the federal level we could see our fiat currency last another century. Eventually it will fail, but quantitative easing will hasten the collapse. Of course returning to real money and doing away with the Fed would probably make our currency last forever but that's just crazy talk :p .

Quote:

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Originally Posted by mutt

Quote:

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Originally Posted by xring

why are taxes needed at all? If the fed can print half of what the goverment spends, why cant they print it all?

---

Control.
Control a man's finances and you have a huge amount of control over the man. If they can't get you with anything else they can always send the IRS after you.

---

Additionally it would cause the Ponzi Scheme that is fiat currency to collapse at a much faster rate.

Its taken a century of fiat currency to get us to where we are ... and if we'd just slightly improve our fiscal responsibility and reduce regulation at the federal level we could see our fiat currency last another century. Eventually it will fail, but quantitative easing and other central banking tricks will hasten the collapse.