QUESTION: I have read the following statement & wish to corroborate it as fact from you, whom I consider best informed:
“ Today the two largest holders of US Treasury debt are not investors or even foreign central banks. The two largest holders are the Federal Reserve and the Social Security Trust Fund. “
Is that statement correct? Thank you.
ANSWER: Yes. The majority of the national debt is held internally among agencies. This raises the potential for debt repudiation. It is possible for the government to “forgive” about $2 trillion among agencies and that would reduce the crisis over the debt ceiling. It would then account for a massive readjustment. This is also on the table for discussion behind the curtain.
