US gold reserves and US Treasury debt owned by foreigners

This is a table of US Federal debt held by foreign investors.  It aggregates the amount of US Treasury debt owned by foreigners.  As of April 1, 2012, foreign investors hold $5,292,300,000,000 of US Treasury debt.

http://research.stlouisfed.org/fred2/data/FDHBFIN.txt

As of October 31, 2012, the US Treasury has 261,498,926.247 troy ounces (8133.5 metric tons) of gold in its vaults.

http://www.fms.treas.gov/gold/current.html

Using first grade arithmetic, and dividing the first number by the latter number, we calculate that each ounce of gold backs $20,238.32 of US Treasury debt owned by foreign bond holders.  As of November 16, 2012, the spot price of gold is $1713.70 per troy ounce.

These numbers should understandably concern foreign holders of US Treasury bonds.  And it also explains why they are accumulating gold as far as they can.  See China.

Bill Buckler quote

"While the US Dollar and Treasury debt are the twin foundations of the system, the major modern indicators of how the system is functioning are the stock market and the precious metals, Gold in particular but also Silver. A stock market investment is a bet ON the system, a purchase of physical Gold and/or Silver is a bet AGAINST it. This is clearly shown by the lengths to which the financial powers that be will go to support the stock market - and to undermine the price of the precious metals." - Bill Buckler, The Privateer, 12 May 2012

"No risk" Tim Geithner

Treasury Secretary Tim Geithner last year (April, 2011) on the question of whether US Treasury debt would be downgraded below AAA.  His answer:  "No risk."  You only need to watch the first few seconds.




Treasury Secretary Tim Geithner this year (April, 2012) on whether the US will become Greece in 2 years.  His answer:  "No risk."  Again, you need to watch only the first few seconds.

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Egan Jones Downgrades USA From AA+ To AA, Outlook Negative

http://www.zerohedge.com/news/egan-jones-downgrades-us-aa-aa-outlook-negative

WSJ: Fed Buying 61 Percent of US Debt

In street parlance, this is called "Peter paying Paul", or among the less polite, a "Ponzi scheme".

http://www.moneynews.com/Headline/fed-debt-Treasury/2012/03/28/id/434106

U.S. Faces S&P Downgrade Again If No Budget Plan, Chambers Says

http://www.businessweek.com/news/2012-02-08/u-s-faces-s-p-downgrade-again-if-no-budget-plan-chambers-says.html

Biden seeks to reassure China on U.S. debt

http://www.reuters.com/article/2011/08/19/us-china-usa-idUSTRE77H0HA20110819

U.S. Vice President Joe Biden on Friday said China had "nothing to worry about" concerning the safety of its vast holdings of Treasury debt, while China's Premier Wen Jiabao gave a ringing endorsement of the resilience of the debt-ridden U.S. economy. 

Given the track record of government leaders and central bankers, and their attempts to soothe markets, it's time to worry.