As US Debt To GDP Passes 101%, The Global Debt Ponzi Enters Its Final Stages

Tyler Durden's picture

Today, without much fanfare, US debt to GDP hit 101% with the latest issuance of $32 billion in 2 Year Bonds. If the moment when this ratio went from double to triple digits is still fresh in readers minds, is because it is: total debt hit and surpassed the most recently revised Q4 GDP on January 30, or just three weeks ago. Said otherwise, it has taken the US 21 days to add a full percentage point to this most critical of debt sustainability ratios: but fear not, with just under $1 trillion in new debt issuance on deck in the next 9 months, we will be at 110% in no time. Still, this trend made us curious to see who has been buying (and selling) US debt over the past year. The results are somewhat surprising. As the chart below, which highlights some of the biggest and most notable holders of US paper, shows, in the period December 31, 2010 to December 31, 2011, there have been two very distinct shifts: those who are going all in on the ponzi, and those who are gradually shifting away from the greenback, and just as quietly, and without much fanfare of their own, reinvesting their trade surplus in something distinctly other than US paper. The latter two: China and Russia, as we have noted in the past. Yet these are more than offset by... well, we'll let the readers look at the chart below based on TIC data and figure out it.

That the Fed is now actively monetizing US debt is beyond dispute (although some semantic holdouts remain - we are quite happy for them). Alas, with China, which has traditionally been the biggest buyer of US paper, no longer buying Treasurys, we are confident that the Fed will have no choice but to be dragged kicking and screaming once again into the fray, especially since traditional buyers of paper, even when allowing for exponential repo market leveraging (and someone please look at what is going on in the BoNY, State Street sponsored $15 trillion quicksand of repo'ed securities, which is the biggest black hole in the shadow banking system and will be the next pillar of the ponzi system to collapse) will be unable to keep up with US issuance. Especially since Primary Dealers already saw their Treasury holding rise to an all time high in the past week, and are loaded to the gills with US paper. So who is buying? Why Japan and the UK.

Japan and the UK? Hmm, if these two names sound oddly familiar, allow us to refresh one's memory. Behold the pristine leverage condition of both these two countries, in all its glory.

Hint: look at the far left.

So somehow the world's two most indebted countries (recall that Japan is about to in total pass 1 quadrillion debt) are out there and buying up the biggest amount of US debt (after the Fed of course)? Sorry, but while we are amusing by this attempt by the global ponzi regime to keep itself alive (even as Russia and China prudently step aside from the mauling that is sure to follow), whereby the most indebted nations keep buying each other's debt in the most transparent and potentially deadly shell game in history, we are also confident this is unsustainable. Which means the Fed will have no choice but to step in. And since when it comes to the capital markets, the ride up is over since we have now crossed the point where incremental profits are drowned by incremental input costs (thank you $106 WTI), the Fed now has just one mandate: to keep the US fiscal machine well-greased by buying up US debt at zero (and beginning in May negative) rates, through wanton monetization. 2012 may prove to be quite eventful after all.

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EscapeKey's picture

To infinity and beyond!

MillionDollarBonus_'s picture

OMG! Check out this vid!

Brad Pit absolutely PWNS libertarians and Ron Paulite loons for their ignorance!! LOL. I feel sorry for doomer libertarians. Not only are they totally wrong about economics and morality they are also uncool.


EscapeKey's picture

I will vote for whoever E! Networks tell me to vote for.

Coolness sorted (after all, that's more important than financial health)!

whstlblwr's picture

Visionary gives more money to RP, he's not scaredy cat to admit support for RP.

All of us give money to help RP win.

Temporalist's picture

Your Brad Pitt is so 2009; Brad Pitt is in with Ron Paul

The Daily Show 2/1/12

DeadFred's picture

Brat Pitt is certainly my go-to guy for sage advice! LOL

ATM's picture

You're an arrogant fool with no knowledge of history. This shit has played out many times before and each time asswipes like you were saying the same thing - everything is fine, we don't have to worry about the spending, about the debasement of the currency. It feels good so do it.

Until people are rioting in the streets.

People like you are the most dangerous among us. Maybe you should figure out what that means as history is repleat with examples of what happens to you and Brad Pitt in the end.

MillionDollarBonus_'s picture

Lol whatever loser!! Brad Pit is probably the single most COOL person in the world, and he has totally rejected your lame libertarian theories. Lay off the lectures NERD.

whstlblwr's picture

Super cool, he endorsed RP and said he'd be hanging out with him.

Really ATM, you've been here year and still respond to MDB this way, my complaint is he seems to be dim-witted.

ATM's picture

Maybe you didn't notice my new Avatar. I'm now the Honey Badger because I just don't give a shit and I take what I want!

RealFinney's picture

Exactly, Brad Pitt is a big star who makes films with the most profitable studios in the world.


He certainly would stoop to be in some anti-bank, anti-debt, anti-consumerist polemic.


Right Tylers?

davey's picture

Youve got a lot to learn million dollar bonus,maybe you'll grow up one of these days.i will be laughing at you as gold hit 25 hundred.

itstippy's picture

Brad Pit oozes cool from every pore.  They should make a Summer Blockbuster Action Flick where Brad Pit plays Tim Geithner and he has to race against time to defuse the National Debt Clock before it hits $15T.  That would be AWESOME! 

economics1996's picture


He (Brad Pitt) is tight with the Hollywood Yids and fucks Angelina Jolie; his brain is made of shit, which is why the Yids probably love him.


WonderDawg's picture

He's an idiot. Left Jennifer Anniston for the psycho-sexual Angelina. What a moron. Left a cool lady for a slutty weirdo. Not cool at all in my book. You can't buy class. You either have it, or you don't. Sorry, Brad and Angelina are sorely lacking.

victor82's picture

Yes, but didn't he play a fellow named Tyler Durden once in a movie?

ATM's picture

No that was Edward Norton.

Dr. Engali's picture

Best troll ever. I see you caught a whopper.

Al Gorerhythm's picture

Lay off the hopium pills, wanker.

Dr. Engali's picture

MDB caught him a fish. Hook line and sinker. Watch him real it in.

Al Gorerhythm's picture

You have tried to warn, admonish and educate a complete moron. You are wasting your energy whilst he wastes oxygen. This is a mind that cannot adjust, nor absorb. He (sic) is a sociopath who believes (re. frequent postings) that the so-called elites (money counterfeiters) and social-engineer fascists (bought-and-paid-for government lackeys and their bureaucrat handlers), the people who got us into this mess (by design, using the Rothchild formula), want to learn from their mistakes and valiantly lead us to salvation. "Trust the experts!" is his worn out logic.

MDB. I hope, come the revolution (if it's not a peaceful one) that you have the courage of your convictions (and convictions will happen) that you wear your colors on your sleeve, but preferably on your forehead. Its a big one, so get an A3 copy of your avatar and staple it to your skull (shouldn't hurt, no sense..... no feeling). Oh, and don't slink off when it gets hot, mmmmkay.

AnAnonymous's picture

You're an arrogant fool with no knowledge of history. This shit has played out many times before and each time asswipes like you were saying the same thing - everything is fine, we don't have to worry about the spending, about the debasement of the currency. It feels good so do it.

Until people are rioting in the streets.


Every of these crisis, marked at some point by the currency being turned down. The currency bought less and less because people refused to sell their products in exchange of the currency.

US citizens have learned from history. They have made sure that a large number of countries that provide key commodities for any society can not walk away from their currency. They are trapped. And the USD will keep buying those commodities for a long time.

The drama is different in the making. The downfall will not come from the bottom of the consumption ladder refusal to trade, but the impossibility to trade because those countries will no longer have enough to sell against USD. Depletion of resources.

As to riots, they have been there for some time now, but in irrelevant places.

Riots in US citizen countries? US citizens who no longer belong to the US citizen world are moving to places where the riots are considered irrelevant.

Dont worry, be happy is real.

lunaticfringe's picture

MDB. Did your mother buy you luggage when you graduated from middle school?

azzhatter's picture

Man, I've just been waiting and waiting for Brad Pitt to tell us what to do. Finally he speaks> sarc


Good actor/major douchebag

Abitdodgie's picture

He is married to the CFR what do you expect.

trav7777's picture

he's never been a particularly good actor...he's just a guy that looks like redford. 

respect the cock's picture

The fuck scene in Thelma & Louise was pretty good.

alphabrew's picture

That video was dumb.  Seriously, Pitt's lips were moving but didn't say anything.  "I've been to a Socalist country.  We're fine."  What the fuck ever, dude.

Al Gorerhythm's picture

He lives in a socialist country and we're not fine. What a fucking dolt (Pitt). On par with MDB. Pitt wouldn't know a socialist if one pissed on him (which they are) and MDB wouldn't know honesty if it hit him between the eyes.

Pitt and MDB trapped in the Democracy labyrinth. 

economics1996's picture

Its all good if you are making millions per movie.

Al Gorerhythm's picture

OMG! Check out this vid!

OMG! Check out this moron!

rodocostarica's picture

congrats MDB you got the PIT part right.

trip kitchen's picture

MDB, what gives, is this a drinking game for you?  Another red arrow, another shot of Cuervo?

cranky-old-geezer's picture



Brad Pit absolutely PWNS libertarians and Ron Paulite loons for their ignorance!! LOL.

Actually no.  Not even close.  He bitched about people (in general, no specific group cited) saying USA is heading toward socialism and the government is "dismantling the country". 

Socialism isn't correct.  Fascism is.  

And yes the government has been dismantling the country, starting with dismantling our manufacturing base and sending it overseas.  Ok the government didn't do it.  Companies did.  But the government set up tax laws and such making it advantageous for companies to send manufacturing overseas.

Not only are they totally wrong about economics and morality they are also uncool.

Ok, now we know what's important to you, "being cool".  You'll follow anybody if they're "cool".

Most "cool" people ...the ones you worship... know jack shit about economics.

And you haven't displayed any knowledge of economics here, except maybe Keynesianism, which is bullshit.

john39's picture

Not a slam at all of Ron Paul or those who back him, but here is somethying to consider:

whstlblwr's picture

Need to consider that this is a movement that doesn't need televsion. Wife's parents start to question why news doesn't show Ron Paul, what are they scared of?

We send them clips and show all his support from local papers, that are hidden from national news. They are close to changing support for Obama to Paul without MSM. Fuck you TV.

Al Gorerhythm's picture

They'll only cover it when the fuckwads running the MSM stations feel their legitimacy is threatened. Too late you treasonous cunts. You have already flown your colors. We won't be needing your services.

Common_Cents22's picture

"To infinity and beyond!"   Wasn't that Ben Lightyear?

TooBearish's picture

Now that's fukking FIGHT CLUB....nuke everyone's Visa account...ha!

economics1996's picture

No way your girfreind is that hot.

LawsofPhysics's picture

"the Fed is now actively monetizing US debt is beyond dispute"

Something that the Bernanke said he would never do.  fucking execute this guy already.


" Behold the pristine leverage condition "  that is halarious, reminds me of a Monty Python skit about a meeting between companies that stacked things on top of other things.

TruthInSunshine's picture

The Bernank's greatest quotes (thus far). Be afraid. Be very afraid:


  • (November 15, 2005) "With respect to their safety, derivatives, for the most part, are traded among very sophisticated financial institutions and individuals who have considerable incentive to understand them and to use them properly."
  • (July, 2005) "We’ve never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s gonna drive the economy too far from its full employment path, though."
  • (October 31, 2007) "It is not the responsibility of the Federal Reserve – nor would it be appropriate – to protect lenders and investors from the consequences of their financial decisions."
  • (November 21, 2002) "The U.S. government has a technology, called a printing press (or today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at no cost."
  • "The money supply is not changing in any significant way. What we’re doing is lowering interest rates by buying Treasury securities."
  • "One myth that’s out there is that what we’re doing is printing money. We’re not printing money."
  • (When asked directly during a congressional hearing if the Federal Reserve would monetize U.S. government debt) "The Federal Reserve will not monetize the debt."


Bernanke Lies Under Oath re: Monetizing Debt - YouTube


Bernanke tells 60 Minutes reporter that Fed IS "printing money," and that the Fed is NOT "printing money," within 21 months (same reporter) 


taniquetil's picture

Saying the Fed is not printing money is like claiming that giving an alcoholic a bottle of booze and saying "well I'm not getting him drunk." And yes, this metaphor does work on multiple levels.

kaiserhoff's picture

Well done.

Now as to Tyler's question, a buyer might be anyone who wanted risk free yield..., oh wait, that was yield free risk.

mick_richfield's picture

OK, so, to logically extend this list, here's what Bernanke will be saying in the near future:

1. "I do not think we will need a nuclear war to fix the mess we made by printing all this money."

2. "I do not think we will need an intercontinental nuclear war."

3. "I do not think they will let me into one of the COG bases."

4. "I do not think."