The Treasury Issued Debt. The Fed Bought It. Again.

We Borrow. We Buy. We Pretend It’s Fine.

May 22, 2025

Once upon a time, U.S. Treasury auctions were competitive.

Global capital—foreign governments, pension funds, private banks—lined up to buy the world’s “safest” asset.

That’s changing.

Today, the U.S. government issues debt... and increasingly, the only buyer left is the U.S. itself—via the Federal Reserve.

This isn’t a theory. It’s the architecture of modern monetary policy.

What the Numbers Say

  • In 2023, the Fed owned over 20% of all marketable U.S. Treasuries. That share is growing again.

  • In Q1 2025, more than 60% of new debt issuance went toward refinancing maturing debt—not new spending.

  • Foreign ownership of Treasuries is at its lowest level since 2006. Japan and China are quietly stepping back.

When organic demand weakens, the Fed steps in. New money gets created. Bonds get bought. Interest rates get “managed.”

This Isn’t QE. It’s Policy by Necessity.

They’ll say: “This isn’t quantitative easing.”

Maybe not by name. But the function is identical:

The Treasury spends. The Fed buys. Liquidity floods in.

What’s different now is that the private sector isn’t showing up like it used to. That’s not a cyclical quirk. That’s a shift in confidence.

Why This Actually Matters

  • Price discovery is dead.
    When the Fed is both buyer and referee, markets can’t set real rates. That hides risk—and misallocates capital.

  • Inflation risk is mispriced.
    As artificial demand suppresses yields, the true cost of borrowing stays hidden. Until it isn’t.

  • Currency trust erodes quietly.
    This is how dominant currencies avoid a “crash”— but instead choose decay. Slowly. In credibility. In participation. And eventually, in relevance.

Zoom Out: This Is the Endgame of a Debt-Based System

Every empire eventually funds itself. Not through taxes. Not through trade. But through printing.

The U.S. is now doing what France did before the franc collapsed. What Britain did before losing reserve status. What Rome did before it debased the denarius.

The Fed isn’t rescuing the bond market. It is the bond market.

That’s not sustainable. That’s not capitalism.

That’s monetary theater.

Until next time
—Death of the Dollar