10-30-year Treasury yields of 5.2-5.4% - their highest rate since 2007, don’t tell the full story, because US federal debt back then was ~$7T. Now it’s $40T+.
That means while the US had to pay ~$237B to service its debt in 2007, it now has to pay $1-1.2T (five times more, 1/5 of total tax revenues, and more than the US spends on most government programs, including the military).
“Historically, failure to pay the interest payments on bonds is what causes bond markets to collapse,” Grayzone contributor Kei Pritsker points out. “For decades, US debt was considered the safest in the world. This is because the entire international monetary system works off the US dollar, and no one thought the US wasn’t going to pay.”
🗣 “The Iran war changed everything because it showed that US military power, which is the backbone of US global power, is a paper tiger.”
The Treasury may try to print its way out of the crisis of its own making, but as other analysts have pointed out, that carries its own strategic risks.
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