U.S. Debt May Surpass $30 Trillion

The scale of U.S. national debt has repeatedly hit new highs, increasing by twice the amount of last year within just half a year, indicating the rapid expansion of U.S. debt this year. At the same time, with the significant expansion of U.S. debt, the largest buyer of U.S. debt has suddenly emerged, and it is neither China nor Japan.

U.S. debt may exceed 30 trillion U.S. dollars by the end of the year.

In fact, after World War II, the United States was the world's creditor nation, and it can be said that the whole world owed money to the United States. However, after experiencing the "baptism" of multiple wars, a large amount of U.S. funds were consumed, and the United States eventually embarked on the path of borrowing, becoming the world's largest debtor nation today.

Since the United States implemented the tax cut plan, U.S. fiscal revenue has plummeted, which has led the United States to increase its borrowing scale to promote socio-economic development. In this way, the scale of U.S. debt continues to expand.

According to public data, in 2017, U.S. debt first exceeded 20 trillion U.S. dollars, and in 2019, it reached 23 trillion U.S. dollars. This means that U.S. debt increased by 3 trillion in 2 years, with an average annual increase of 1.5 trillion. In fact, U.S. debt did increase by 1.5 trillion in 2019.

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However, since the beginning of 2020, U.S. debt has embarked on an unprecedented large-scale expansion. According to statistics, in less than half a year, U.S. debt has reached 26 trillion U.S. dollars, with an increase of 3 trillion U.S. dollars in half a year, equivalent to the new scale added in the past two years.

If this continues, will U.S. debt break through the 30 trillion U.S. dollar mark? According to international analysts, if U.S. debt continues to expand on a large scale in the second half of the year, it may further break through 30 trillion U.S. dollars. This is not an exaggeration, and the probability of the United States restarting the "large-scale water release" mode in the second half of the year is very high.

Many central banks have begun to sell U.S. debt.

As U.S. debt accelerates its expansion, many central banks have begun to sell U.S. debt in large amounts to protect their own interests. According to data released by the U.S. Department of the Treasury, in March of this year, many countries sold nearly 300 billion U.S. dollars in U.S. debt, leading to a wave of U.S. debt sales.

At that time, due to the epidemic, the U.S. stock market experienced a sharp decline and circuit breakers, and the economy entered a downward interval for the first time, suffering a heavy blow, which triggered widespread market concerns, and many countries began to sell U.S. debt. At this time, Japan, as the largest overseas holder of U.S. debt, is still buying U.S. debt.Subsequently, in April, central banks from multiple countries once again sold off $177 billion in U.S. Treasury bonds, with over $400 billion in U.S. debt being sold off by various countries within two months. A noteworthy phenomenon in April was that China, Japan, and the United Kingdom all sold off U.S. Treasury bonds simultaneously, marking the first time this year for such a coordinated action. Even Japan, which had been consistently increasing its holdings, began to change its stance and started selling off U.S. debt.

According to publicly available data, over the past 20 months, China has sold off more than $130 billion in U.S. Treasury bonds and remains the second-largest overseas "debt holder" of the United States. Japan's holding scale still ranks first, making it the largest overseas "debt holder" of the United States.

The largest buyer of U.S. debt suddenly emerges

Since U.S. debt has already surpassed the $26 trillion mark, who is the largest buyer of U.S. debt? According to data released by the U.S. Department of the Treasury in June, overseas investors hold $6.77 trillion in U.S. debt, which allows us to calculate that domestic U.S. investors hold $19.23 trillion in U.S. debt.

It is clear that domestic U.S. investors are the largest holders of U.S. debt, including U.S. corporations, related institutions, and individuals, as well as the Federal Reserve. Among them, the Federal Reserve is the largest buyer of U.S. debt, not China or Japan.

Since the wave of U.S. debt selling began in March, the Federal Reserve has been purchasing U.S. debt every day, with the highest single-day purchase volume reaching $75 billion and an increase of over $1 trillion within a month. As of now, the Federal Reserve holds $4 trillion in U.S. debt, far exceeding the debt holdings of China and Japan, making it the largest buyer of U.S. debt.

Today, the Federal Reserve continues to purchase $4 billion in U.S. debt daily, continuing to "prop up" the U.S. economy. However, the economic situation in the United States for the second half of the year remains pessimistic. Federal Reserve Chairman Jerome Powell stated that this mainly depends on the development of the pandemic. If there is a resurgence of the pandemic in the second half of the year, it is possible that the Federal Reserve will continue to "flood" the market and may continue to purchase U.S. debt on a large scale.