Posted on 06/28/2023 1:32:22 PM PDT by Kaiser8408a
Jay Leno once quipped about the Obama meal. “Order anything you want and hand the bill to the person standing behind you.” Biden, like his boss Obama, is praciticing a similar strategy. Spend like a drunken sailor and just keep borrowing until the whole thing breaks.
The barrage of fresh Treasury bills poised to hit the market over the next few months is merely a prelude of what’s yet to come: a wave of longer-term debt sales that’s seen driving bond yields even higher.
Sales of government notes and bonds are set to begin rising in August, with net new issuance estimated to top $1 trillion in 2023 and nearly double next year to fund a widening deficit. The Treasury is already in the middle of an estimated $1 trillion bump in bills as it seeks to replenish its cash coffers in the wake of the debt-limit deal.
It’s an explosive mix for borrowing costs as debt sales are swelling and the Federal Reserve continues to reduce its balance sheet at a time when traditional buyers of Treasuries overseas are discouraged by currency hedging costs.
The trailing 12-month (TTM) interest on the debt clocked in at just under $600 billion in May. This was up from $350 billion at the start of 2022, less than 18 months ago. The government has added an extra $250 billion in expenses per year on just debt service
$58 billion in six-month bills at an investment yield of 5.45%
With this flood of Treasury bills, the share of short-term paper underpinning the debt is approaching 20%. That’s considered the upper limit, meaning the Treasury will soon have to turn to issuing longer-term notes and bonds. That means the Treasury will be locking in higher interest rates for the long term.
(Excerpt) Read more at confoundedinterest.net ...
Janet Yellen headed to Beijing in July to make-nice with China to buy Joe’s debt
Bidon has always been a globalist. He wrote an article in a 1989 0r 1990 WSJ that stated he supported the subjugation of the United States into the international order.
Obama and Biden are rightly being slammed in the article. But it’s important to note that they could not have done any of this without GOP support. There are no good guys in this story, with the possible exception of Rand Paul.
$58 billion in six-month bills at an investment yield of 5.45%
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When risk free interest rates rise to relatively high levels many investors will start selling equities and putting the proceeds into treasuries. A guaranteed 5.45% is a very attractive yield. This could put selling pressure on the stock market.
“But it’s important to note that they could not have done any of this without GOP support.”
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Yep, the GOP enablers. They are part of the spending problem.
They killed America a long time ago, it’s just looting the corpse at this point.
As a point of order though, the writer of this article should not disparage drunken sailors, because, they are spending their own money!
Bidon has always been a globalist.
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Its hard to say what he really is except for being a sleazy flip flopping politician. He’s FOR whatever is convenient to say at the moment.
“They killed America a long time ago, it’s just looting the corpse at this point.”
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The debt is simply unpayable. Its $250K per taxpayer, and rapidly rising. And unfunded liabilities are approaching the $200 trillion mark.
An economic day of reckoning is coming.
He is also an amoralist, that is true. It could be true that he wrote the article at a time when it seemed good, but that is the position that he took.
Actions have consequences.
Yup. Rand Paul is the ONLY lawmaker who has been fighting for spending reductions. His penny cut and nickel cut legislation went nowhere. For a medical doctor, he knows more about economics and accounting than his 534 contemporaries.
GHW Bush. “New World Order.”
Yep. Demonic CIA traitor.
The debt was never going to be paid back, and it will never be paid back, that isn’t the issue.
Governments don’t do that. There is in fact no reason to do so. They “roll over” their existing debt, by purchasing new bonds, extinguishing debt, and all sorts of financial jiggery-pokery like open market operations and things that I don’t claim to understand.
What they DO have to do, is make timely interest payments on the existing debt. That is not negotiable. Historically governments had long duration debt, one of the things they did in the 1990s was basically re-finance all the debt into short term duration paper. This meant the government could borrow at near zero rates.
BUT, it also means that the entire national government debt, all $32 Trillion of it, rolls over every 4 years or so. If you pencil it out even roughly it quickly becomes obvious that normalized interest rates of 4% to 8% quickly puts the hurt on and chews up the lions share of tax revenue.
Anything higher than that is game over. TILT. So it looks to me like they painted themselves into a corner a long time ago. Supposedly they can sell off assets on their balance sheet, but that looks like a bunch of crap they bought at par that nobody else was dumb enough to buy in the first place. A lot of this crap isn’t the first bite at the apple either. Social Security was rolled into the general budget in 1968 - and Fannie Mae was offloaded onto the taxpayers that year as well.
Ida Mae Fuller beneficiary #1 paid in $40 to Social Security or whatever, and withdrew $22,000 in “benefits”. So everyone who can add and subtract knew at some point it would unravel.
You’ll sometimes hear the usual suspects claim that’s what is so good and necessary about “open borders” - a steady stream of low wage replacement workers, who are no doubt drawn to the US by promises they will be required to support retired Americans in their old age.
Sure, Jan. Sure.
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