Madness of various sorts

ZH:

total outstanding US public debt just hit a new historic level which probably would be better associated with a red color: as of the last work day of November, total US public debt just surpassed $18 trillion for the first time, or $18,005,549,328,561.45 to be precise, of which debt held by the public rose to $12,922,681,725,432.94… total US debt to nominal GDP as of Sept 30, which was $17.555 trillion, is now 103%.

If you think that’s bad, get a load of this.

3 Responses to “Madness of various sorts”

  1. Steven Den Beste Says:

    And when the Fed stops forcing interest rates down to 0%, and lets them rise back to something like historic norms, suddenly the interest the US will have to pay on the debt is going to be amazing and totally painful.

  2. feeblemind Says:

    I haven’t checked lately, but I am given to understand that using 1970s methodology, inflation is running near 7%. In any event it is running at a substantially higher rate than the government is reporting.

    So my question is this:

    Why would anyone fund the Fed’s debt and watch their money shrink due to inflation over the passage of time?

    Or is all the debt being bought by the big banks with money they have taken at the discount window for near 0%?

    If that’s the case I would like to get in on the action. I wouldn’t mind borrowing a couple billion from the Fed at 0% so I could buy their bonds earning 1%. I could manage to scrape by on the difference.

  3. Steven Den Beste Says:

    Nobody funds the Fed’s debt. They create money out of thin air.

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