Tech • AI • Robotics
🚨Révolution sur la dette américaine : pourquoi le Trésor a-t-il racheté des milliards de dette ?
8/10TL;DR
For the first time in a decade, it is the U.S. Treasury and not the Central Bank (Fed) that is directly buying back U.S. debt, marking a major shift in the monetary and financial mechanics of the United States.
KEY POINTS
Historical context
For several years, the traditional mechanism was that the U.S. Central Bank (Fed) bought U.S. debt on the secondary market, thereby creating money out of nothing. This policy eased the pressure on public debt and increased the monetary base.
Change in 2024
For the first time in 10 years, the U.S. Treasury, equivalent to Bercy in France, is directly buying U.S. debt (approximately $15 billion recently). Unlike the Fed, the Treasury does not have the ability to create money; it therefore uses existing money.
Impact on the money supply
Buybacks by the Treasury do not create new money. The overall money supply (M2), which includes liquidity in bank accounts, does not change directly. This means no additional money is injected into the system during these operations.
Operation of the Treasury and banks
Since 2008, fiscal surpluses and Treasury revenues no longer stay in commercial bank accounts but are centralized with the Federal Reserve (Fed). Tax revenues thus leave the commercial banking system, reducing the money in circulation in the short term.
Monetary flows and the role of the Treasury
When the Treasury pays its obligations, for example to civil servants, the money returns to the banking system. Thus, liquidity movements between the Treasury and banks are key to understanding current monetary dynamics.
Problematic long-term debt buybacks
The Treasury often purchases long-term securities (30 years), which are less attractive to investors, reducing the average duration of U.S. debt. This long-considered risky debt is replaced by cash or short-term debt (T-bills), improving liquidity and risk profile.
Issuance of T-bills as substitution
When the Treasury buys back long-term debt, it may also finance this by issuing T-bills, very short-term debt—often considered cash-like by investors such as Warren Buffett—that are perceived as extremely safe and liquid. This phenomenon reduces risk and the cost of debt servicing.
Consequences on confidence and liquidity
This practice enhances the credibility of U.S. sovereign securities by adjusting the debt structure. The fact that the Treasury intervenes directly signals that the traditional Fed-based system is evolving.
Transition to a new monetary paradigm
The speaker discusses a shift toward a form of modern "free banking", where technologies such as asset tokenization and stablecoins will play a pivotal role. These innovations could replace long-term debt as the dominant collateral in the financial system, introducing more flexibility and new forms of secured assets.
Monetary system reorganization
Tokenization will allow authorized companies to issue validated digital assets, which could redistribute the power of money and asset creation beyond traditional central institutions, announcing a radical evolution of the global financial landscape.
Short-term outlook
A dedicated video on stablecoins and tokenization is planned, emphasizing the strategic importance of these movements to understand the upcoming evolution of financial and monetary markets.
Summary of immediate impact
- The Treasury buys U.S. debt with existing funds.
- The M2 money supply does not increase directly.
- Long-term debt is replaced by short-term securities or cash.
- The traditional monetary system is undergoing deep transformation.
Anecdotes and notable facts
- The last similar episode dates back to 2000-2002, with an intermediate period in 2013.
- Direct buybacks by the Treasury had almost ceased between 2013 and 2024.
- The example of the $15 billion tranche illustrates the start of a major shift.
In sum, this unprecedented operation by the U.S. Treasury reflects a profound reorganization of U.S. financial mechanisms, involving less money creation through the central bank and a more direct and strategic management of public debt, preparing for a reshaped monetary system potentially disrupted by digitalization and tokenized assets.
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