Russia buying less US debt.

[Kid Stanislaus]

This is exactly what will eventually lead to a default by the US. The only way to put it off is to offer more interest on the bonds we are selling and that causes our debt to go up even faster. That could lead to hyperinflation. A default could lead to deflation. Either alternative is VERY undesireable.

http://www.thestreet.com/story/11157521/1/russia-to-reduce-us-debt-purchases.html?cm_ven=RSSFeed

[Ripon83]

Hyper inflation I feel personally capable of managing, but deflation scares the crap out of me. Only deflation hedge is cash, and holding that is free kin scary.

[Kid Stanislaus]

Hyper inflation I feel personally capable of managing, but deflation scares the crap out of me. Only deflation hedge is cash, and holding that is free kin scary.

Well, you could buy govt. bonds for deflation and PMs for inflation. I'd think that having PMs around would be at least as scary as cash.

[GrizzlyGuy]

That might seem worrisome, but keep in mind that Russia only owns a tiny fraction of US debt. It owns about 2.8% of the debt owned by foreign countries. To put things in perspective, see below:

[Ripon83]

Hmm....wouldn't the Fed Reserve be on that list....? Especially with QE 1and2?

I keep cash and coin handt, but I'm talking about wealth preservation not SHTF. Inflation is relatively easy tp preserve your wealth during, but deflation.....not so much. Besides in a deflationary state the likelihood of federal default is more serious. I wouldn't be wanting us bonds....

[ElvenSoul]

They got smart!

[GrizzlyGuy]

Hmm....wouldn't the Fed Reserve be on that list....? Especially with QE 1and2?

In the pie chart above, I think the holdings of the FED are included in the big blue slice (U.S. Individuals and Institutions). The FED currently owns about $1.35 billion trillion of it, see here.

[problemchild]

In the pie chart above, I think the holdings of the FED are included in the big blue slice (U.S. Individuals and Institutions). The FED currently owns about $1.35 billion of it, see here.

I thought the Fed had about 100 trillion?

[GrizzlyGuy]

I thought the Fed had about 100 trillion?

See the US Debt Clock, there is only about $14.4 trillion in total debt. Maybe you are thinking about unfunded liabilities? Those are only at around $62 trillion.