The US government has borrowed $4.2 trillion in the last 12 months, pushing the total national debt to over $27 trillion. In order for Uncle Sam to borrow, somebody has to lend. So, who is buying all of these government bonds?
Foreign and domestic investors, commercial banks and US government entities all buy US debt, but increasingly, the Federal Reserve is backstopping the market and making this borrowing binge possible.
If you thought maybe the federal government would try to rein in the spending after running a recorded budget deficit of $3.13 trillion in fiscal 2020, you were sorely disappointed. Uncle Sam has not kicked his spending habit.
October was the first month of FY 2021 and the federal government kicked off the year with a $284.1 billion budget deficit, according to the latest Monthly Treasury Statement. It was the largest October budget shortfall in American history.
Gold and silver sold off big and the Dow surged Monday on the announcement the Pfizer had successful coronavirus vaccine trials. But Friday Gold Wrap host Mike Maharrey says investors should maybe tap the brakes on thinking that a coronavirus vaccine is a cure-all. In this episode, the looks a little deeper at the long-term ramifications of a vaccine. He also breaks down the newest budget deficit numbers.
The FY2020 budget deficit came in at $3.13 trillion. At some point, the US government will have to reckon with the debt and spending. But according to recent analysis from the nonpartisan Committee for a Responsible Budget, neither Trump nor Biden appear prepared to do so. In fact, its analysis shows Trump would only be slightly better than Biden when it comes to spending and debt.
Gold has been trading sideways for several weeks. But there are all kinds of reasons to be bullish on the yellow metal. So why isn’t the price of gold rising faster? Where are the gold bulls? In this episode of the Friday Gold Wrap podcast, host Mike Maharrey tries to answer that question and discusses some of the reasons people should be buying gold.
The fiscal 2020 budget shortfall totaled $3.13 trillion as Uncle Sam added another $124.6 billion to the deficit in September, according to the latest Monthly Treasury Statement.
That more than doubles the previous record deficit of $1.4 trillion set in 2009 at the height of the Great Recession.
Regal Cinemas shut down all of its US theaters this week. The company said the closure is temporary, but it reveals the deeper strain in the retail sector. In this episode of the Friday Gold Wrap podcast, host Mike Maharrey digs deeper into the retail mess and talks about what it is telling us about the broader economy. He also discusses the ongoing stimulus debate and the national debt news that nobody is talking about.
As Peter Schiff put it in his podcast, President Donald Trump tweeted the fiscal stimulus rug out from under the markets when he abruptly announced he was ordering his representatives “to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business.”
The Dow tumbled just over 375 points and the NASDAQ fell 1.6%. Gold also dropped, falling back below $1,900 an ounce.
The national debt has pushed above $27 trillion.
The US government has added over $3 trillion to the national debt this year alone and there is no sign that the borrowing and spending will stop.
In fact, most people don’t even seem to care.
The 2020 budget deficit surged passed $3 trillion in August even as the US government continues to borrow and spend at a torrid pace. Since March, the federal government has added $3.3 trillion to the national debt. That is on top of the $1.4 trillion in debt Uncle Sam piled on in the 12 months through February 2020.
So, who is buying all of this government debt?
There are a lot of buyers out there, but when you boil it all down, the US government wouldn’t be able to maintain this level of borrowing and spending without the backstop of the Federal Reserve.