Article discreditng the thesis that Mao "killed millions of people" in The Great Leap

[kandrathe]

That is clearly, obviously wrong. Low interest rates and low bond yields are the *result* of investors lending to the United States. There was *tremendously high* demand for treasury paper. Bond yields remained at historic lows (AKA bond prices remained at historic highs) from 2008 right up until very recently. Investors held great mountains of US government bonds, as safe assets during an ongoing flight to safety. That didn't change at all until Trump was elected, presumably on the belief that he will increase spending and lower taxation.

-Jester

Who is buying US Treasury Bonds?

1. Nearly 30 percent of the Federal debt is owed to 230 other Federal agencies.
2. One-fourth [of publicly held debt] is held by other governmental entities, like the Federal Reserve, and state and local governments.
3. Foreign governments and investors hold nearly half of the nation's public debt.
4. if you add up debt held by Social Security, and all the retirement and pension funds, nearly half of the U.S. Treasury debt is held in trust for your retirement.

These investors are "Other (individuals, government-sponsored enterprises, brokers and dealers, bank personal trusts and estates, corporate and non-corporate businesses, and other investors) - $1.198 trillion. (Sources: Federal Reserve, Factors Affecting Reserve Balance, May 12, 2016. Treasury Bulletin, Ownership of Federal Securities, Table OFS-2, as of June 2015)"

Which is <10% of the total Treasury Bonds held. Its a good racket for the US government; you print fiat money, use it to buy bonds with a GRR, which are eventually paid off by future tax payers.

"Is the Fed simply monetizing the debt? That's one of the effects. The Fed purchases Treasuries from its member banks, using credit it created out of thin air. It has the same effect as printing money. By keeping interest rates low, the Fed helps the government avoid the high-interest rate penalty it would usually incur for excessive debt."

I see zee smokes and zee mirrors...

The sell off began last summer as the bond market hit its tipping point. In the face of the US economy beginning to recover, large stake holders, including foreign banks started to pull back from their propping up of the US economy. Foreign governments have balance of trade issues, in which they seek to keep US consumption high, and the value of the dollar amenable to favorable trade for their workers/economy.

The grim reality is...

In other words, without all of this debt that Barack Obama and Congress have been getting us into, we would be in the worst economic depression in U.S. history right now. And I haven’t even factored in state and local government debt, corporate debt or household debt. The truth is that I am not exaggerating one bit when I say that we are enjoying a debt-fueled standard of living that we simply do not deserve.

IWB -- The Shocking Truth About How Barack Obama Was Able To Prop Up The U.S. Economy