United States Treasury security
A United States Treasury security is a government debt issued by the United States Department of the Treasury through the Bureau of the Public Debt. Treasury securities are the debt financing instruments of the United States federal government, and they are often referred to simply as Treasuries.
Directly issued by the United States government
- "Treasury bill" redirects here.
Treasury bills (or T-bills) Mature in one year or less and do not pay interest prior to maturity Many regard Treasury bills as one of the least risky investments available to U.S. investors unless of course there were a total economic collapse with a bankruptcy of the US Government. Better to invest in tangibles.
- This is the modern usage of "Treasury Note" in the U.S.
The 10-year Treasury note has become the security most frequently quoted when discussing the performance of the U.S. government bond market and is used to convey the market's take on longer-term macroeconomic expectations.
- "U.S. Bonds" redirects here.
Treasury bonds (T-Bonds, or the long bond) have the longest maturity, from twenty years to thirty years. Since the 1970s the 10 Year Treasury Note and the 30 year fixed mortgage have had a very tight correlation.
Treasury Inflation-Protected Securities (or TIPS) are the inflation-indexed bonds issued by the U.S. Treasury. The principal is adjusted to the Consumer Price Index (CPI), the commonly used measure of inflation. When the CPI rises, the principal adjusts upward. If the index falls, the principal adjusts downwards. TIPS are currently offered in 5-year, 10-year and 30-year maturities.
U.S. savings bonds
Savings bonds were created to finance World War I, and were originally called Liberty Bonds. Unlike Treasury Bonds, they are not marketable. In 2002, the Treasury Department started changing the savings bond program by lowering interest rates and closing its marketing offices. As of January 1, 2012, financial institutions no longer sell paper savings bonds.
Domestic Holdings of US Debt
During the Obama Administration, for the quantitative easing monetary policy, the Federal Reserve holdings of U.S. Treasuries increased from $750 billion in 2007 to over $1.7 trillion as of end-March 2013. On September 13, 2012, in an 11-to-1 vote, the Federal Reserve announced they were also buying $45 billion in long-term Treasuries each month on top of the $40 billion a month in mortgage-backed securities. The program is called QE3 because it is the Fed's third try at quantitative easing. The result is that an enormous proportion of the US debt is actually owed from the Treasury to the Federal Reserve.
International Holding of US Debt
It is potentially disturbing to the U.S. national security that China owns the majority of the national debt. As of January 2014, the foreign holders of at least $40 billion of U.S. Treasury Securities are:
|Holders||$US billion||Ratio to GDP||Percent change since Jan 2013|
|Caribbean banking centers1||293.3||n/a||+6.8%|
1Bahamas, Bermuda, Cayman Islands, former Netherlands Antilles, British Virgin Islands and Panama
2Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates, Algeria, Gabon, Libya, and Nigeria
3includes Channel Islands and Isle of Man
- National debt: Federal Reserve System's Ponzi scheme of Quantitative easing-Debt monetization devaluation of Fiat currency through Money supply-Treasury bills bought mostly by China and Japan
- Economic collapse: Inflation, Agflation, Deflation, Stagflation, Hyperinflation, Panic of 1907, Panic of 1893, Panic of 1837
- Stock market crash (Stock market crash of 1929) leading to Bank runs and Great Depression (Economic depression)
- Economic bubbles: The Coming Derivatives bubble, Real estate bubble (Subprime loans, Bailout, Obama administration corporate bailouts), Dot com bubble (Tulip mania)
- Financial Crisis of 2008 leading to Recession of 2008 (Recession), Economic stimulus, American Recovery and Reinvestment Act of 2009, Recovery Summer 2010
- Obamanomics: Obamunism Economic planning of the Obama administration fiscal policy, Obama administration monetary policy, Obamacare, Federal funding via Crony capitalism (Obama donor list), Deficit spending, Similarities between Communism, Nazism and liberalism, Obamageddon
- John Maynard Keynes' liberal Keynesian economics of Barack Obama
- Ludwig von Mises' conservative libertarian Austrian economics and Fiscal conservatism-Conservative economic policies of Ron Paul
- Treasury Bills, TreasuryDirect.gov. U.S. Department of Treasury, Bureau of Public Debt. April 22, 2011. Accessed April 7, 2014.
- Average 30 Year Mortgage Rates Remain Under 4% Headed into May 2012, RWB Press, April 30, 2012, http://www.rwbpress.com/2012/04/29/average-30-year-mortgage-rates-remain-under-4-headed-into-may-2012/#mortgageinterestrates
- Benjamin Shephard, Park Your Cash, http://www.investingdaily.com/pf/15730/park-your-cash.html, InvestingDaily.com, July 9, 2008, Accessed April 7, 2014
- http://www.treasurydirect.gov/indiv/products/prod_tips_glance.htm, TreasuryDirect.gov, Treasury Inflation-Protected Securities(TIPS), 7 April 2011, Accessed April 7, 2014
- Pender, Kathleen, Treasury takes new whack at savings bonds, http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/12/04/BU0ATNHMO.DTL, December 3, 2007, The San Francisco Chronicle, April 7, 2014
- Federal Reserve Statistics Release
- http://www.treas.gov/tic/mfh.txt, Major Foreign Holders of Treasury Securities, 17 March 2014, treasury.gov
- CIA World Factbook – Field Listing :: GDP (official exchange rate)
- The World Factbook – Field Listing :: GDP (purchasing power parity) for China figures only