The United States Falls $188 Million More in Debt Every Hour

US Treasury bonds are getting dumped by more entities. This time Pimco dumped their US Treasury bonds according to the National Review. NR has published this starting number:

Even as the Treasury issues more and more debt, there are fewer and fewer people willing to buy it. I forgot to mention the really startling number. Pimco (which has now dumped US Treasuries) estimated last month that, under QE2, 70 per cent of the US Government’s debt is being bought by the Federal Reserve.

In other words, under the 2011 budget, every hour of every day, the federal government spends $188 million it doesn’t have, $130 million of which is “borrowed” from itself.

QE2 has been by all accounts a flop and is due to finish at the end of June. What happens then? Who makes up the difference? Will interest rates rise to make US debt more attractive? Or has American government now run up against the real “debt ceiling” – the willingness of the world to fund it?

Do you understand what that means? 70% of what the federal government spends in now made up from nothing by the Federal Reserve. You have to ask why your gas prices, food prices, and other goods are going up in costs?