2021 may be the year that the world loses confidence in the dollar

SovereignMan/Simon Black

“In this way, the government doesn’t actually have to pay anyone back; they just keep refinancing and kicking the can down the road farther out into the future. And the Treasury Department is praying that bondholders will continue this practice forever. Unfortunately that’s probably not going to happen. For starters, foreign governments like China and Japan (which are among of the biggest owners of US government debt) have already started reducing their holdings.”

USAGOLD note:  I referenced this Simon Black article in a recent Daily Market Report and repost it now for those who may have missed it. In essence, the Secretary of the Treasury has become in recent history the government’s chief bond salesman whose job it is to place the trillions in US sovereign debt with global buyers. That which isn’t sold either domestically or internationally is sold to the Federal Reserve as part of its quantitative easing program.

bar chart showing growth in the interest paid on the national debt 1970-2019

Sources:  St. Louis Federal Reserve [FRED], U.S. Bureau of Economic Analysis


Repost from 1-14-2021

 

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