Simon Black highlights in Schiff Sovereign that global demand for American debt is vanishing as yields hit twenty year highs.
Public debt hit 38.9 trillion dollars in May 2026 per congressional records.
Foreign ownership of federal debt has collapsed from 34 percent to 24 percent of the total market over the last decade.
Interest expense has surged past 1.2 trillion dollars according to federal reserve figures and now consumes roughly 15 percent of all federal outlays.
Global investors are abandoning new debt issuance because long term insolvency risk now exceeds the yield premiums offered.
The federal government requires a constant flow of new buyers to fund a 2 trillion dollar annual deficit while traditional foreign demand vanishes.
This mismatch forces the federal reserve into a role as the captive buyer of last resort for debt the global market refuses to touch.
The treasury market has devolved from a global safe haven into a closed loop of domestic monetization where the state prints currency to purchase its own IOUs.
Fiscal policy is now mathematically trapped because borrowing costs are scaling faster than the economy can grow.
The government is cannibalizing the value of the dollar to suppress the cost of its own mounting debt.
How will the federal reserve prevent a total currency disintegration when it is forced to become the sole buyer of an ever increasing supply of sovereign debt?