Posted on 11/09/2023 3:10:21 AM PST by davikkm
Steven Zeng at Deutsche Bank notes the stunning (but hardly surprising) reality that Treasury borrowing is "now on par with levels during the 2020-2021 pandemic".
"Both weaker fiscal positions and Fed QT are contributing factors.
With a growing view that the Fed may lengthen (https://t.me/marketfeed/427665) the duration of QT, and annual deficits projected at around $1.7-$1.8 trillion (https://home.treasury.gov/system/files/221/TreasuryPresentationToTBACQ42023.pdf) over the next few years, these issues are unlikely to go away soon."
"At the same time, a widening mismatch between supply and demand for USTs could exacerbate the issue through increased debt interest expenses."
This will continue as the Treasury repays its debts, and there is no way I can imagine it absent structurally persistent inflation and high yields.
We need some new measurement devices, because I think everything that went to screwed-up status in the 1920s...leading to 1929...is in full view today. Inflation, bank failures, economic downturn, real estate market spiraling, university debt, etc.
When will the markets take over and set the rates?
Did you watch the fun after the 10y auction yesterday.
Talk about some mismatch and shenanigans ...
Maybe it’s time for Congress to authorize the roll out of a few dozen one-trillion-dollar coins. Deposit them into the Fed’s accounts and deem the debt paid off.
At least the interest payments wouldn’t be so onerous.
Do we really need to borrow?
We live in Bidenomics! The best economy ever! 😊
No reason to collect income taxes if borrowing is infinite…
The founders knew direct taxation on income was a bad idea…
The logical inconsistency screams, but today's government of "Wimpy paying tomorrow for his hamburger today" has become a tragic joke. Expect some forms of collapse. Regional as in paper assets.
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