If you add the government’s deficit then something approaching $10 trillion needs to be raised in the next 12 months:
Who is going to buy this and at what rate? I don’t think that China and Japan will be too interested.
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If history tells us anything, it will be Deutsche Bank or the Russians.
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I don’t think Russia has enough to keep us in business, and it would be a sincerely brilliant strategic move on the part of China (not to mention every country in the EU) to forgo buying at the next auction. That would force the Fed to raise raise dramatically, and, well, you can figure out the rest.
By ignoring the sturm and drang of the daily news cycle and quietly refusing to buy, the rest of the world could send a powerful message to Trump - and I suspect there are few people in the right positions overseas who are discussing this very possibility.
Oh, two separate but interconnected side issues:
How a Supreme Court Ruling Could Weaken Fed Independence, Shake Markets
Justices are revisiting ‘Humphrey’s Executor,’ a decision barring presidents from firing certain federal officials for purely political reasons
President Trump lashed out at Jerome H. Powell, the chair of the Federal Reserve, on Thursday, saying “Powell’s termination cannot come fast enough!”
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Government borrowing creates the demand for bonds.