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Biden keeps hyping something he calls ‘Bidenomics’ which sounds a lot like something a marketing scheme on a late-night TV commercial complete with an 1-800 number and a PO Box in South Florida that really goes to Nigeria.
In the real world, everyone hates Bidenomics and despite the media’s constant economic hype, things are bad. Nevertheless, the Biden administration (and frankly most Democrats and Republicans) are committed to spending more money and then claiming that any efforts to cut the insane mega-trillion budgets will endanger Social Security. What’s really endangering it is constant spending with no plan as to get more money except maybe peddling some more treasury bonds with insane interest rates.
And even then, good luck.
Nobody wants U.S. Treasury bonds.
Elementary economic forces — too much supply and not enough demand — have collided to create the worst stretch for U.S. government bonds since the Civil War. The government keeps borrowing to cover its budget deficits, while once-reliable buyers of that debt, both at home and abroad, have pulled back.
Auctions of fresh bonds that were once routine are now going terribly. And bond portfolios are getting absolutely hammered.
That includes the Treasury Department.
The government is borrowing more than expected, increasing the supply of Treasurys and dinging their value. Meanwhile, the Federal Reserve is selling down its own holdings, dumping yet more bonds into a market that doesn’t really want them.
Already 2.5% of the U.S.’s economic output is going to service its existing debts, a number that some analysts expect to hit 4% by 2030. Already running huge deficits, the only way for Treasury to pay the interest — along with ambitious spending programs like the CHIPS Act and student-loan forgiveness — is to keep borrowing.
But from whom?
China and Japan, once reliable buyers of Treasury bonds, have been selling them to prop up their weakening currencies. A decade ago they held more than 22% of U.S. government bonds; today it’s 7%.
There was a lady who once said that socialism works until you run out of other people’s money.
“No One Wants U.S. Treasury Bonds”
Smart investors generally try to stay away from investing in countries undergoing a Communist revolution.
So I definitely believe you.
I guess I’m in trouble! Almost all my money is invested in treasury bonds. 5 1/2 % is a good return for me.
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Who wants to buy bonds when there is no possibility they will be redeemed at maturity? BTW, wasn’t the basis of the Cloward-Liven strategy to destroy the (capitalist) economy so that the population would demand socialism? Yeah, I think it was. Putting so many people on the role was just the means to accomplish that. But there is more than one way to skin instead they’ve decided in driving up spending to unsustainable levels to do it. And in Biden they have just the person to do it. He is a one trick pony whose solution to everything is to spend more money on it.
That is, of course, “Cloward-Piven.” The spell-check on my Kindle is ridiculous. And evil.
And “role” was “dole.”
People, voters better wake-up.
Very soon the slope will be too great to apply the brakes.
If there is no change in DC in 2025, braking will be out of the picture.
Inflation looks to be unavoidable.
Funny, governments have been debasing the currency (causing inflation) since Roman times and probably earlier. One of their main tricks.
I thought we already had inflation?
Yeah, and inflation is a lot worse than 3.5% from what I’ve seen.
What I meant about debasing the currency in Roman times, was like, filing down the edges of coins to get a little silver, using cheaper metal to make the coins, etc.