No one is buying U.S. debt anymore, but the federal government keeps on spending. This does not bode well.
· Nov 10, 2023 ·

At some point if you max out all your credit cards, the lenders will stop sending you new ones. When that happens, not only does the spending spree end, you either have to pay off your debt, or you have to declare bankruptcy if you're unable to pay.

Considering that our government charged $1.5 trillion to its credit card over the last 4 months, and another $1.5 trillion over the next six months; you have to wonder when the credit will run out.

And there are signs that it is on its way.

Yesterday, the federal government issued 30-year treasuries to quickly borrow $24 billion dollars.

Our usual lenders China, Japan, Saudi Arabia, and Russia didn't show up, and 25% of the debt had to be bought by the primary dealers on Wall Street, the buyers of last resort.

Of course, they demand a bigger yield on investment than foreign governments do. Meaning we'll be paying more in interest via our taxes.

You can see the big Wall Street spike at the end of the day on this chart.

And even with the bigger yield, those dealers are saying that there's no way they can keep backing the volume of debt that the government wants to borrow.

Plus who wants to buy bonds today, if the yield is going to be higher tomorrow?

Which is exactly the problem causing banks like Silicon Valley to go under. They're stuck holding 30-year bonds that they should have been able to liquidate at face value, but nobody wants them because new bonds are going to have a higher yield.

The "safe" bond market, where most retirees were told to put their 401Ks and other investments after 65, is on track for its 3rd consecutive year of losses.

Something that has never happened before.

No one but crypto boys expects the U.S. to default, but if even a single Treasury auction fails to sell all the debt, you can sure expect a panic in the markets.

Just the hiccup of yesterday's treasury auction dropped markets nearly 1%.

All of this to say, if The Babylon Bee prophecy about Dave Ramsey putting the federal government on a strict envelope budget plan doesn't come true soon, we might be in for a very wild ride.

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