This certainly hasn't helped things and if someone thought they might be able to finance even a few more months at $100B per month, having Japan solidly out of the market really should make them think differently.
This is ultimately the import of the diagrams I posted. If the Debt Ceiling is increased, the Fed will print more money and it will cause Hyper-inflation, QE2 already takes us to the brink of this and perhaps beyond, but each month has added an additional 5% to the commodities index, by June the butcher's bill is 45%, in a few months (by September this is 60%)
The Republican Budget does nothing to forestall this, Obama's "Taxes" will only make things worse by actually reducing revenue and slowing growth all the more.. and encouraging more retirements that just inflate the obligation.
Worse, the administration has boots on the ground signing up every human who can be put on the government dole as fast as possible pushing this crisis. Pushing it for everything they can because this is their way to the nirvana of REVOLUTION. They are almost as bad as those who wish for chaos to bring back the 12th Imam, except for they have the nations' checkbook and they are busy writing that last few checks before the whole scheme ends under its own weight.
” having Japan solidly out of the market really should make them think differently. “
Then, there’s the scenario that no one talks about - even in whispers —
One of the ways this could play out could be that Japan, rather than buying or continuing to hold, liquidates its T-Bill holdings to pay for the rebuilding...
That would prompt a QE response from the FED (to keep the value of US Treasuries artificially inflated in a suddenly glutted market) that makes QE2 look like pocket change....