Chart of the Day: U.S. Government Borrowing -- and Foreign Investors Lending -- At Record Pace

Three key takeaways from the chart and highlight below:

1. The Federal government is presently borrowing more (via the 10-year treasury note today) than it ever has.

2. Foreign buyers are absolutely key to keeping U.S. lending rates (tied to the interest rate on treasuries) at competitive levels.

3. Our "trade deficit" provides the capital that fuels our "investment surplus", which reflects the present dynamics around U.S. government borrowing, U.S. consumers spending, and foreign producers and consumers saving. It has much more to do with the developmental stages of the respective players than it does manipulation by the political powers that be.

click to enlarge

The U.S. Treasury’s largest ever sale of 10-year notes, at $26 billion, was easily digested by the market Wednesday. The yield was 2.96 percent, and the bid-to-cover ratio was 2.55, higher than the 2.40 average of the past four quarterly refunding auctions. Indirect bidders, a category which includes foreign and international monetary authorities, took 61.27 percent, just below the 64.1 percent average over comparable prior sales. (Bloomberg)

emphasis mine...