Global markets are now facing a $12 trillion dollar reckoning. The problem is staring the financial apocalypse right in the face and has the potential to accelerate the coming stock market crash. A recent report from the Congressional Budget Office has warned that deficits will total $11.6 trillion, or 4.4% of gross domestic product between 2020 and 2029. That’s far higher than the historical average of 2.9% over the past 50 years, according to data from INTL FCStone. This reckoning will come when no one wants to buy that debt, and that time is quickly approaching.
According to Business Insider, a deficit is only as ominous as the market’s inability to buy the excess debt that’s issued along the way. INTL FCStone macro strategist Vincent Deluard has serious concerns about that. So far, foreign central banks, and the U.S.’ central bank, The Federal Reserve. Central banks have begun selling debt though, not taking on more. The Fed has slashed Treasury holdings by $260 billion since October 2017, their foreign counterparts have sold almost $1 trillion over the past four years. Deluard says that those debts will terrifyingly be picked up by retail investors andpension funds.
Poster Comment:
There would be no public debt if we still had Lincoln's Greenbacks.