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IMO US federal debt will likely become an increasingly significant issue. Interest costs of losing reserve status may be small or large. It really depends on ma
by Gustomaximus 11y ago
IMO US federal debt will likely become an increasingly significant issue. Interest costs of losing reserve status may be small or large. It really depends on market confidence. And given historically low rates today, significant cost increases are not that unlikely if US loses influence on global of monetary policy. From this large cost increases could put the currency in a death spiral given ~450 billion annual repayment costs already at todays low rates.
Please note I'm not saying this will happen, but feel it should be a recognized risk if borrowing continues at the current trend. I believe this is an elephant in the room which is likely to cause a massive macroeconomic shock in 5-20 years. I simply cant see the current political parties making the sacrifice to address the unfettered debt growth. I too recognize most financial experts tend to disagree with this view.