The Fed is screwed

The Fed is screwed
The Treasury’s total marketable debt is around $28 trillion, with roughly 20-25% maturing annually (based on typical debt profiles), about $5.6 to $7 trillion matures in 2025. Who wants to own U.S. govt 30 year debt at 4.8% yield?????

Not this old ccp agent

I mean the Venetians made loans to the Byzantine emperor

That poster is fucking retarded, a higher rate is bad for govt good for bond holder (which would be him).

At that rate you about quadruple your money for free after 30 years. Pretty damn good for a bond.

you forgot to deduct inflation

True, in real terms you'd have about 1-2% of purchasing power left.
But that is even worse with lower interest rate. OP's screenshot is still retarded.

Just change the laws. The Treasury is required to "cover" a deficit by issuing bonds. Since the government creates money, why bother with this? The answer is ostensibly to impose "fiscal discipline" on spending -- but most of the deficit is actually interest. The majority of our actual spending is covered with taxes already. Or if you're committed to selling bonds because you want the money tied up in securities instead of reserves, change the law to allow the Federal Reserve to purchase them on the primary market.

There is no reason why the issuer of the currency needs to borrow money from the public -- who only got their money from the government (or possibly a private bank) in the first place.

They are going to drop rates. Owning bonds at 5-7% will also net you pretty good appreciation as well.

He's a billionaire

its about securing a monopoly through the rule by law. its straight out of the marxist playbook, and the beneficiary of that artificial central planned and subsidized by the people isnt the FED, but the private banks. And its not really a secrete

MAGA

You mean MIGA

And if they say no?

tariffs!

If the Fed goes belly-up the USD will become monopoly money.

some jeet is managing his account though. you think a 78 year old billionaire is selling market tips using NFTs access codes? kek

it's fear porn to convince retards to buy the membership NFT

whoopsie, wrong image

so why arent the rates going down to frontrun this

i see this is your first rodeo...

Borrowing money from the public lets the government spend more money without increasing the money supply. To increase the money supply would be inflationary.

It's highly likely JPow will be replaced with someone who'll crank up the money printer to 110%

Banks will buy it. It's better than the 2% garbage they have now.

Who wants to own U.S. govt 30 year debt at 4.8% yield?

I mean it is getting really tempting. Sure you get 4 years of inflation and policy uncertainty but 26 years of no worry coupons.

I actually worry about a big deflationary shock. Late this year maybe next year. If US stops exporting dollars the eurodollar market breaks down. China is forced to devalue and you take an immediate -20% in chinese bonds in hard currency. Northern European state balance sheets can cushion the blow for the Euro but it is very unclear.

If we look at the past 15 years deflation has been more of a problem than inflation and we are going back to that sort of aging demographics world. If you look at Japan since 1990 the problem has been deflation not inflation. And in a deflationary environment treasuries at 5% look like one of the best investments.

you forgot

not this old man

Borrowing money from the public lets the government spend more money without increasing the money supply. To increase the money supply would be inflationary.

When they spend to a deficit, by identity they are creating bank reserves in that amount. So the bond sales drain the excess reserves. The secondary market is one of the most liquid in the world, they just aren't counted as "money" because back in the day reserves were convertible into gold and securities were not.

Bond yields go up because they are more risky you fucking retard.

I think you missed my point. The fed can just buy treasuries while selling treasuries with different maturities. They don't have to wait until they mature. And the current market price is 4.8%, so OP is asking "who wants to buy at 4.8" well clearly people because that is the price. And the maturity dates are meaningless.

30 years is a long time. Whats the chance that there is at least 1 inflationary period that wipes out the majority of the value of these bonds? Personally I wouldn't touch 30 years unless it was like 10%+. And most buyers of treasuries are forced buyers, Banks, states, local govs, pensions, insurance companies, etc. who are often legally required to hold US debt. Foreign countries / central banks blindly buy them as well for various reasons. Retirees blindly pile money into them. Owning these things is basically tax, its stupid, only useful from an investor perspective for speculating on rates.

quadruple your money for free after 30 years.

What a deal, lmao.

With the fractional-reserve system this is irrelevant.

30 years is a long time. Whats the chance that you have a 1969-1979 period in the stock market? What about a Nikkei 1990-2020 run? Capital preservation is a tricky proposition the longer you go.

If you had a free mandate for bonds what would you hold instead? Bunds at half the yield? JGBs at a quarter of the yield? Lebanese eurobonds that end up 15 cents on the dollar?

Not sure you're point. The 70s were horrible for bonds. And the Nikkei is not diversified, totally different risk profile. Bonds are straight up gimped vs equity, because you pay a premium for stability, which is massively overvalued by most people. But if I was forced at gunpoint to hold bonds I'd buy tbills to lose the least amount possible, but if I had to buy medium+ duration I'd by private debt to at least have a chance at >0 read yield.

Is there literally ANY scenario that won't have the US default within 30 years? I know the plan is that the benefits of AI combined with cuts will glide down the debt but that was before the market had its confidence in US treasuries shaken.

The status quo would have been easily sustainable with a few tweaks. Now the paradigm has shifted though with the US moving from global leader to pariah state, its way more uncertain.

Israel first

Cuz boomers start kvetching about the debt and muh gdp:debt ratio like it means something. It’s impossible for them to view debt as a sort of lubricant that greases the wheels of economics (and global economics) that is secreted when there’s deflation and withdrawn when there’s inflation. Boomers are fixed in their thinking and they think the world laws that exist for them exists for anything and everything else.

January 2027

MAGA removed from Congress in 2026 midterms with Dems, independents, and moderate Republicans being 80% of seats in house, 67% in Senate

Trump, Vance, most of cabinet, removed from office.

Rubio/Johnson interim president

Amendment to spin off most powers of DOJ, Treasury, and State entirely out of hands of Executive, particularly tariffs.

Federal Reserve style appointed board determines these policies instead

2029

Amendment is ratified

What are the odds of this? 2%? Maybe less?

If we are super lucky, this happens and we remain a hegemony. If we are just lucky, the US will have an Italy-like trajectory. If we are unlucky, we become Argentina or Russia in the 1990s.

well also the gov issued currency is debt. The "debt" is just longer duration incentives to provide more value to people who hold the currency/debt. Its funny I think if it was just flipped it around semantically, it would solve this retarded obsession with "solving" the debt. Just don't call it "gov debt" but "gov equity" or some bullshit. And then no one would care probably.

Low because there doesn't seem to be anything trump can do for his followers to turn. You can already see the narratives they are building, like the crash was inevitable after Biden and trump just had to pull the band aid off, they spin the most retarded bullshit about anything and magatards slurp it up. Or the tariffs, when they're on magatards are full on socialist central planners who want some economic revolution, but then when the tariffs are off it was all a ruse, 4d chess to get better trade, trump does it again, art of deal! Their ideology changes on a dime, meaning their completely mentally enslaved to the maga propaganda machine. Even if the US enters a depression and the dollar collapses it will be blamed on the deep state or some bullshit, or it be framed like its "short term pain" for some sort of mythical centrally planned golden age that only can be achieved with trump as dictator for some reason.

That’s what tokenized treasury bonds would do.

That causes Lost Decades (Japan did it)

Imagine I'm driving my car, I have my foot down on the petal and I'm going at 50mph and all of a sudden my car starts slowing down. I push the petal more but I'm still slowing down. Is it the petal that causes the slow down? Should I actually let off the gas if I want to go faster? Or could it be my car started going up a particularly steep hill and I just need to press the gas more? That's basically the story of Japan.

Bitcoin.

You forgot the part where another driver pointed a gun at his head and forced him to slow down because he was going too fast (the Plaza Accord)

the crash

ahh yes the crash that sent btc from 66k to 107 to now 85k

i can't believe that happened to me!!!

Or the tariffs

wait what tarrifs?

do they even exist?

are they here in this thread with us?