When Reagan was building nuclear warheads and talking about Star Wars as a mode in defeating Red Russia in a nuclear war, US debt to GDP was 33%. Today, thanks to the deleterious schemes of Bush and Obama, debt to GDP is 101%, or $21 trillion.
In spite of all that debt and leverage, investors still love American debt — mainly because we’re the finest home and the shitty block. Taking advantage of this happenstance, our treasury secretary, Steve Mnuchin, is exploring ‘ultra-long bonds’ as a way to finance government obligations for longer periods of time.
Amongst other things, he’s exploring a zero coupon 50 year duration bond, and reintroducing the 20yr bond.
“We have a working group looking at it,” Mnuchin said. “We think that it’s something that could absolutely make sense for us at Treasury.”
It makes sense, from an balance sheet standpoint. If people are willing to lend the government money over 50 years, for NOTHING, I say do it. This way, we can build walls everywhere, one on the Mexican border, one on the Canadian border and maybe even one between Alaska and Russia, in order to keep those fucking white walkers out.
The committee investigating this idea said treasury issuance will likely have to be increased once the Fed starts unwinding their balance sheet.
Recent odds are calling for a 62% chance of a June Fed rate hike.
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And before the issuance, there needs to be some sort of stock market panic to drive rates even fabulously lower, to the benefit of Uncle Sam and his taxpayers. Virtually free mo’ney. Can’t go wrong.
Munchin is so smart he can barely talk. This is because he uses so much brain power on numbers.
Does this mean we’ll be signing up to 50 year home mortgages too?