Debt out the wazoo, but someone is still buying it.
The US gross national debt has ballooned by $1.33 trillion over the past 12 months to $21.8 trillion as of December 14, according to Treasury Department data. Over the past six months alone, this debt has ballooned by $740 billion, despite a strong economy: Fueled by a stupendous spending binge and big-fat tax cuts, the government has been increasing its debt at a rate of $123 billion a month on average over the past six months.
But who’s buying all this debt?
US government debt is an income-producing asset for investors — the creditors of the US. And when the pile of US debt increases, by definition, someone has to buy it. But who? China, Japan, and other foreign investors? Nope. They’re shedding this debt. So here we go.
Foreign investors in total reduced their holdings of marketable Treasury securities in October by $25.6 billion from September, to $6.2 trillion, having shed $125 billion since the end of October 2017, according to the Treasury Department’s TIC data released Monday afternoon.