“Hey, if inflation is going to be such a problem, why aren’t we seeing it reflected in the long-term bond market yet?”
Because we can’t sell any. Read:
Robertson said while he doesn’t think the Chinese will stop buying US bonds, the Japanese may eventually be forced to sell some of their long-term bonds.
“That’s much worse than not buying,” he said. “The other thing is, they’re buying almost exclusively short-term debt. And that’s what we are offering, because we can’t sell the long-term debt. And you know, the history has been that people who borrow short term really get burned.”
I’ve been saying for years that we couldn’t export dollars endlessly, that eventually we’d saturate that market. Well, we did — or close enough, anyway. Now that Treasury is running the printing presses 24/7, and the Fed “can’t” raise interest rates, things will get worse.
As if all that weren’t enough, just wait (not too long now) until we have to start refinancing all our existing short-term debt. Ever paid off a low-interest credit card by putting the balance on a higher-interest credit card? No? Good, you’re smarter than our government.