Anonymous wrote:We are heading towards a calamity unless Congress starts doing its job, which is extremely unlikely. At this point, the only way to avoid a yield-debt spiral (in which yields rise as debt rises, making service more and more unaffordable, eventually driving the country to insolvency) is massive austerity. This means tax increases across the board plus entitlement reform, which will deepen the current recession but prevent total fiscal and monetary collapse. Note that the current bill does the opposite. So, what will happen over the coming months and years? Yields will continue to climb, driving up borrowing costs and depressing economic activity. Note this is on top of the tariffs. Each 90 days, more debt will be issued at ever higher rates to pay for debt service, driving yields ever higher. At some point, the Treasury will start to print money (rather than enact austerity.) This will trigger both double-digit inflation and much higher yields--think 20%+. The Fed will no longer have any influence over rates. Existing debt holders will make out like bandits as the real value of their principal falls. However, the savings of pretty much every retiree and future retiree will be wiped out. We will enter a depression that only true leadership will get us out of. This is all a very real scenario, folks. Just because it hasn't happened here for eighty years doesn't mean it won't. There's nothing magical about the United States, certainly with our government no longer functioning in any real way.

Anonymous wrote:We are heading towards a calamity unless Congress starts doing its job, which is extremely unlikely. At this point, the only way to avoid a yield-debt spiral (in which yields rise as debt rises, making service more and more unaffordable, eventually driving the country to insolvency) is massive austerity. This means tax increases across the board plus entitlement reform, which will deepen the current recession but prevent total fiscal and monetary collapse. Note that the current bill does the opposite. So, what will happen over the coming months and years? Yields will continue to climb, driving up borrowing costs and depressing economic activity. Note this is on top of the tariffs. Each 90 days, more debt will be issued at ever higher rates to pay for debt service, driving yields ever higher. At some point, the Treasury will start to print money (rather than enact austerity.) This will trigger both double-digit inflation and much higher yields--think 20%+. The Fed will no longer have any influence over rates. Existing debt holders will make out like bandits as the real value of their principal falls. However, the savings of pretty much every retiree and future retiree will be wiped out. We will enter a depression that only true leadership will get us out of. This is all a very real scenario, folks. Just because it hasn't happened here for eighty years doesn't mean it won't. There's nothing magical about the United States, certainly with our government no longer functioning in any real way.

Anonymous wrote:

Anonymous wrote:Fannie and Freddie IPO will save the day!

You can’t change the net worth of the sovereign by selling off public assets. It is all priced in.

Anonymous wrote:Fannie and Freddie IPO will save the day!

Anonymous wrote:We are heading towards a calamity unless Congress starts doing its job, which is extremely unlikely. At this point, the only way to avoid a yield-debt spiral (in which yields rise as debt rises, making service more and more unaffordable, eventually driving the country to insolvency) is massive austerity. This means tax increases across the board plus entitlement reform, which will deepen the current recession but prevent total fiscal and monetary collapse. Note that the current bill does the opposite. So, what will happen over the coming months and years? Yields will continue to climb, driving up borrowing costs and depressing economic activity. Note this is on top of the tariffs. Each 90 days, more debt will be issued at ever higher rates to pay for debt service, driving yields ever higher. At some point, the Treasury will start to print money (rather than enact austerity.) This will trigger both double-digit inflation and much higher yields--think 20%+. The Fed will no longer have any influence over rates. Existing debt holders will make out like bandits as the real value of their principal falls. However, the savings of pretty much every retiree and future retiree will be wiped out. We will enter a depression that only true leadership will get us out of. This is all a very real scenario, folks. Just because it hasn't happened here for eighty years doesn't mean it won't. There's nothing magical about the United States, certainly with our government no longer functioning in any real way.

Anonymous wrote:

Anonymous wrote:Unusual--major red flag. BOJ bonds and treasuries getting crushed. Yields jumping as market realizes deficit gig is up. Interest payments now surpass entire defense budget!

No yields are jumping because BBB is making progress to cut taxes even more, combined with hit to GDP from tariffs.

Anonymous wrote:Unusual--major red flag. BOJ bonds and treasuries getting crushed. Yields jumping as market realizes deficit gig is up. Interest payments now surpass entire defense budget!