This article was published by The McAlvany Intelligence Advisor on Wednesday, October 31, 2018:
The announcement from the U.S. Treasury was terse:
Total net marketable securities issued in the fourth quarter will be a projected $425 billion.
That will bring total debt issued in 2018 to $1.34 trillion, the highest since $1.59 trillion was issued in 2010.
2018 debt issuance also jumped 146% from 2017, when just $546 billion was issued.
It took Liz McCormick at Bloomberg to explain just how Treasury was going to manage all of that: stay short and provide inflation protection. Specifically, Treasury’s latest offerings will focus on five-year maturities or less, and brush the dust off its TIPS – Treasury Inflation-Protected Securities.
But of course that hardly addresses the underlying problem: a government continuing to spend beyond its (taxpayers’) means. The numbers are ugly: The national debt of the United States Government jumped by $1.3 trillion during its fiscal year that ended on September 30. The gap between the government’s spending and its income for that fiscal year was $779 billion, a jump of $113 billion over the year before.
At some point, the question will be raised: Who will buy? That was the question raised back in 2011 when Standard & Poor’s cut the government’s credit rating and put it on its “negative” watch list. Said S&P at the time: