Post #628 by mungofitch on the Macroeconomic Trends and Risks board

Personal Finance Topics / Macroeconomic Trends and Risks

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If there are better opportunities to invest, do it. Whoever buys those (discounted?) securities may do very nicely if "the price is right".

Certainly true.
The macro concern is that, when "the price is right", with the Elephant buyer not playing, the bonds would be trading at low prices to attract other buyers. The US would have to spend very much more on interest as new bonds have to be issued at deeper discounts.

US deficit averaged 3.9% 1995-2024. It's expected to come in at about 6.2% this year, more than half of which is already interest. (CBO figures from last month, an eternity ago). That could turn into a feedback loop: too big an interest bill, fewer buyers for such an uncreditworthy issuer, higher interest bill...

Jim

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