PUBLIC DEBT UPDATE

Figures for total public debt outstanding were uncharacteristically jumpy this week and briefly passed $11.5 trillion.

Mon: $11.36 trillion

trillion Tue: $11.55 trillion

trillion Wed: $11.52 trillion

trillion Thu: $11.49 trillion

(Click chart to enlarge in new window)

To put these figures in perspective, every $100 billion increase in the public debt is effectively a $900 tax hike for each American household.

Keep in mind that this headline figure drastically underestimates the real national debt because it excludes the present value of our Medicare and Social Security liabilities. Properly figured, the real national debt is $61.9 trillion. That’s $560,000 per household.

FED BALANCE SHEET UPDATE

The Fed’s balance sheet has stayed relatively steady as increases in permanent holdings of Treasurys, Agencies and Agency mortgage-backed securities (MBS) have lately been offset by declines in central bank swap lines and term auction credit.

It should be noted that the balance sheet only reflects about 70% of the Fed’s Agency MBS purchases since it began quantitative easing earlier this year. These purchases can take up to two months to settle. Only then do they hit the balance sheet.

QE (“PRINTING PRESS”) UPDATE

Under its quantitative easing plan, the Fed has committed to purchasing $1.25 trillion of Agency MBS and $200 billion of Agency debt by the end of the year, along with $300 billion of Treasurys by autumn. In other words, it is printing $1.75 trillion dollars this year in order to finance home loans and the federal government’s stimulus.

So far they’ve purchased $622 billion of Agency MBS, though only $462 billion is reflected on the balance sheet due to the settlement issue noted above. These purchases have occurred very evenly, about $20-$30 billion per week since January. At that rate, the Fed will hit the $1.25 trillion target on schedule.

With Agency debt, the Fed is half way to its $200 billion target. And with Treasurys, the central bank has purchased $190 million so far.

(QE data is published on the NY Fed’s website.)