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Printing dollars to buy treasuries won't work forever. China has already started tilting away from treasuries and holds almost a trillion dollars less than they
by nly 6y ago
Printing dollars to buy treasuries won't work forever. China has already started tilting away from treasuries and holds almost a trillion dollars less than they did a few years ago.
Now there is talk of the Fed issuing notes with durations longer than 30 years...
There will be consequences eventually
- dcolkitt 6y agoThe counterpoint is Japan, which has 280% debt-to-GDP ratios (about double the US), and is still selling government bonds at 0% interest rates. I'm not saying demand is infinite, but it very well could be significantly higher than the current supply. In particular older demographics tend to heavily favor low interest rates and high money supplies. Old people tend to have high savings, and are risk-averse enough that they'll park it in liquid sovereign bonds even at negative real yields. And the continuing aging of American and world demographics isn't changing for the next century.
- Aperocky 6y agoThe bank of Japan literally to hold half of that. It's just printing cash with extra steps.
- ArnoVW 6y agoExactly. Once you factor in "who owns that debt" the picture changes. See 'external debt by country' https://en.m.wikipedia.org/wiki/List_of_countries_by_external_debt https://en.m.wikipedia.org/wiki/List_of_countries_by_externa...