The Bitcoin Layer Bitcoin & Liquidity Academy 2: How $37 Trillion in US Debt Shapes Global Markets
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Sep 8, 2025 Delve into the fascinating world of fixed income securities and their pivotal role in capital markets. Discover how loans transform into securities and explore the vast $120 trillion bond market. Unravel the connection between U.S. Treasuries, GDP, and the overall economic landscape. The intricate dynamics of global monetary policy and the collaboration of central banks also come to light. Finally, examine the crucial ties between tax receipts and national debt, setting the stage for future liquidity discussions.
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Fixed Income Is Vastly Bigger Than Central Banks
- The global fixed income market exceeds $120 trillion and dwarfs central bank balance sheets.
- U.S. Treasury securities (~$37T) are only a sliver of the overall fixed income ecosystem.
Bonds Are Loans, Not Ownership Stakes
- Fixed income securities are loans packaged as securities under regulation like the 1940 Acts.
- Governments and corporations both borrow via fixed income to fund spending and investment.
Treasury Coupons Versus Equity Ownership
- Treasuries pay coupons and return principal at maturity, unlike equity which has no maturity date.
- Buyers accept lower yields on Treasuries because the U.S. government carries lower credit risk than corporations.