U.S. Government Wants To Keep A Closer Eye On Its Creditors

By Chris Rossini

The Carl Menger Center reports:

The US Treasury Department has issued a new rule that would request foreign governments, foreign central banks, and international monetary authorities to report to the federal government if they hold large positions in US Treasury securities. With nearly $13 trillion in debt held by the public, and almost half of that held by foreigners, it’s understandable that Treasury is getting nervous about foreign governments using their Treasury holdings as leverage. Of course, the solution to that is not to issue trillions of dollars of debt in the first place.

But this new rule that ends the reporting exemption that foreign governments and international entities enjoyed is just the latest in a series of steps that the US government is taking that serve to irritate foreign nations. Does Treasury really think that foreign central banks are going to expend precious man-hours compiling information and filing reports that only benefit the United States? Since foreign purchases of Treasuries, along with Federal Reserve quantitative easing, have been the reason Treasury has been able to get away with running such huge deficits and issuing so much debt at such low interest rates, this smacks of Treasury biting the hand that feeds them. Is Treasury really that clueless? It may very well be.

If you're going to loan money to the U.S. government, they want to keep a very close eye on you.

One false move, and:

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Chris Rossini is author of Set Money Free: What Every American Needs To Know About The Federal Reserve. Follow @chrisrossini on Twitter.