Nobody wants U.S. Treasury bonds. Bond Sales are in the worst stretch since the Civil War. The federal government has run up so much debt that few if any around the world, want to lend them money anymore. This cannot end well.
Once a symbol of America’s economic might and accepted as a global coin of the realm, US Treasuries have fallen badly out of favor, with serious consequences for taxpayers, investors, and financial markets.
Elementary economic forces — too much supply and not enough demand — have collided to create the worst stretch for U.S. government bonds since the Civil War. The government keeps borrowing to cover its budget deficits, while once-reliable buyers of that debt, both at home and abroad, have pulled back.
The result: Investors are demanding the steepest yields since 2007. Auctions of fresh bonds that were once routine are now going terribly. And bond portfolios are getting absolutely hammered. The longest-dated Treasury bonds are in a bear market worse than the dot-com bust and almost as bad as 2008.
Already 2.5% of the U.S.’s economic output is going to service its existing debts, a number that some analysts expect to hit 4% by 2030. Already running huge deficits, the only way for Treasury to pay the interest — along with ambitious spending programs like the CHIPS Act and student-loan forgiveness — is to keep borrowing.
They are now TRAPPED in a vicious spiral that can ONLY lead to financial death for the country. There is no other possible outcome because the government will not stop spending.