US government interest payment has virtually been a straight line up since 2020
Despite crossing $1 TRILLION, this debt crisis keeps getting worse pic.twitter.com/YE8v8uLZHG
— Game of Trades (@GameofTrades_) May 18, 2024
2/ What matters here is not overall US government debt but rather the balance of payments. If a country runs a trade deficit this must be offset by financial inflows on the financial account to maintain equilibrium. pic.twitter.com/5GNIHsnPw6
— Philip Pilkington (@philippilk) May 19, 2024
4/ Here we see that the most important component by a very large amount as 'Debt Securities' that are 'Long Term'. In 2023 $924bn were issued and $103bn bought, meaning net issuance of around $821bn. pic.twitter.com/bYk6VvOQtX
— Philip Pilkington (@philippilk) May 19, 2024
6/ It used to be that these bonds were bought by China and other governments/central banks. These were stable buyers because it was part of their trade strategy – prop up the US trade deficit to sell more exports. Now increasingly they are bought by private foreign investors. pic.twitter.com/Bb8Zj0tmsm
— Philip Pilkington (@philippilk) May 19, 2024
8/ This will likely happen in a recession when the Fed lowers rates to counteract the downturn, maybe even more QE. And in a recession tax receipts will fall and unemployment claims will rise – so the US will need to issue even more debt. This will only exarcerbate the problem. pic.twitter.com/UeivJDoNDg
— Philip Pilkington (@philippilk) May 19, 2024