/biz/ - Business & Finance

>>50334331

Buying and selling them can get a little confusing.

What don't you understand OP?

>>50334331
I think you made a wrong turn somewhere anon. We only pretend to know what we're doing here.

>>50334430

Honestly, the trolling and shitposting is fun and hilarious, but very few people here actually know wtf they're talking about. Usually a disagreement just turns into an ad hominem fight anyways.

>>50334331
They're the backbone of the entire economy and understanding them will financepill you.

It's debt. The government owes you interest, which from your perspective will be yield. When you buy a bond, the gov has instant liquidity (cash) to spend freely, but they're indebted to you.

When you read that China owns most of our debt, that literally just means they own a lot of our bonds. Japan owns the most though.

>>50334523
Fr china owns a lot of our debt? And Japan owns most? Damn I didn't know that. Doesn't the fed buy most of the bonds as of recently? And that's really what is meant by 'money printing'?


I tried to take a deep dive on bonds but had trouble answering my questions. Found some good resources on incestopedia like one good article was talking about yield curves. OP you might find this interesting
https://www.investopedia.com/articles/economics/08/yield-curve.asp

>>50334635
The FED isn't allowed to buy bonds directly from the Treasury. They do this weird roundabout thing where OTHER central banks (bank of japan, bank of china) buy the bonds from the US treasury. Central banks then sell these bonds to the open market, and THEN the FED is allowed to buy because that's the law.
https://fred.stlouisfed.org/series/FDHBFRBN

>>50334635

Check the FEDs balance sheet and you'll see what they're holding. Mostly Treasury Bills and Mortgage Backed Securities.

"Money printing" is QE, it's also the FED monetizing government deficit spending. Inflation comes from government deficit spending and commercial bank loans.

QT is just the FED trying to sell off the Treasuries it holds on its balance sheet (or just let them mature and don't roll them over).

>>50334709

^ This. It's retarded. But, for all intensive purposes, the FED is putting securities on its balance sheet and the US Treasury is liable.

>>50334736
QT hasn't existed since the 90s

>>50334709
Damn that is one parabolic looking chart. Scams gotta fall apart at some point

>>50334762
>for all intensive purposes

>>50334635
>Fr china owns a lot of our debt? And Japan owns most?
USD debt is cheap for foreign governments and it used to be pretty risk-free until the US started weaponizing it recently and since USD supply started getting tight after 2008.
if you're china or japan, to hedge your debt and to protect yourself against rate hikes that can make USD debt payments hurt hard, you build foreign currency reserves. in order to make your reserves generate yield, you buy US treasuries.
that said, demand from foreign governments has obviously been in the gutter recently. china decided to lend their USD out to development countries like sri lanka for structural securities. historically low bond yields mean that it's almost better to just hold USD instead. and now that the fed is hiking rates and everyone is getting squeezed on their bond payments, countries liquidate their treasury bonds for USD, stifling demand.

>And that's really what is meant by 'money printing'?
take your time and read archive dot ph/cXow5 very carefully, including the boring accounting examples at the end (they're the most valuable part of the article). make sure you understand every sentence. there are few things more valuable for macro understanding than getting a good grasp on the specifics and considerations related to money printing.

>>50334769

They were able to reduce the balance sheet by about 1 Trillion between 2018 and late 2019. But, then they had the repo crisis and then the whole Covid bullshit.

>>50334736
Why doesn't the government just spend less money AAAAHHHHHHH WHAT THE FUCK ARE THOSE NIGGERS DOING

>>50334709
it's not just central banks that act as the intermediator for the fed buying treasuries. regular banks do as well. but this is not why boj or boc owns lots of US debt.

>>50334827

*intents

>>50334859
Ty anon will study this intently

>>50334859
Oh also in Lynn Alden a troon? She's got great stuff to say but my tranny radar goes ballistic when I see and hear her

>>50334859
Gonna read that archive link too. Thanks

>>50334499
Can confirm, I frequently post on /biz/ and I don't have the slightest clue what I'm talking about

>>50334523
what happens if I have a bond with a german business... and the company bankrupts, or the euro collapses? Do I lose my money? I was duped, so I cannot get the money before 2024. I am mad at the person who tricked me, they did not tell me everything.

>>50335215
Yeah, businesses and nations can default.

Check out Argentinian bonds. 50% 10 year yield. It's that high because they've defaulted several times in the last couple decades so you will most likely NOT get your money back. The 1-year bonds look nice though.

>>50335298
I am going to get that shit back. The bitch that tricked me said once "but why would you want to cancel your bond???!?! your interest will compound like crazy in 15 years!!!!" I just want my damn money back bitch, I am going to simply lose it if things keep going like this

>>50335526
What's the company anon?

wtf is a "default" and wtf is a "bond maturation?"

I know we can look this shit up, but why was none of this even remotely talked about in school when it literally runs the world? Rhetorical question, I know the answer.

>>50335591
an under the radar construction company. They are shady as fuck, but financially sound as hell at the same time. I made a mistake. They keep telling people excuses and lies

>>50335921
because this is a prison planet (can you get of it?). I was taught all about volcanoes, planets, and medieval poetry. I was on top of the world at the end of high school. And then you find out if you do not work as a slave, you are sleeping on the fucking pavement, because if you sleep on the grass you will be sent to jail. Such is life.

>>50335526
You should try holding Gazprom