The Coming Explosion in U.S. Government Debt Issuance

Trader Scott’s Market Blog

October 4, 2016

This articlefrom Zero Hedgediscusses the huge increase in the total U.S. Government public debt outstanding for the fiscal year just ended, which grew by $1,400,000,000,000 (all of the zeros are shown for effect). This is during a time of a relatively “peaceful”environment (for America). And during a time of an economic “recovery”. What in the world is the increase in debt going to look like when the U.S. is no longer in a “peaceful” environment and “enjoying” an economic “recovery”? The unfunded liabilities situation of the U.S. Government (and all levels of Government) has been widely discussed, but there are two things which scare me more. And they are the global derivatives situation, along with the average yield of the total outstanding debt of the U.S. Government. As to the derivatives situation, the numbers are so mind-boggling that for simplicity purposes for me, I just use infinity as the amount outstanding. That situation will never be able to be sorted out without a supernova event. As to the average yield, it is currently about 2.25%. That number is comical. It will be much, much higher in the future. So how in the world is the U.S. Government going to keep paying its’ bills in the future?