When I sat on an emerging market bond desk over a decade ago, we would have countries come to us to float debt on the public market. Sometimes, the offer was withdrawn as there were no buyers, or the price was too high, meaning the interest rate to be paid on the bonds was too steep for a poorly fiscally managed nation to stomach.
We are coming to this point in America.
I wrote about it in my novel 'Currency' as I commuted into Wall Street daily on the train from outside of New York City. (The book will be re-released by Histria Books as part of The Connor Murray Series in April of 2024).
James Carville famously quipped that when he dies and is reincarnated, he wants to come back as the bond market, as that is where the economic, and political power really lies.
The bond market vigilantes are barking as the ratings agencies make their voices known on American fiscal responsibility.
Moody’s Investors Service on Friday lowered its ratings outlook on the United States’ government to negative from stable, pointing to rising risks to the nation’s fiscal strength, reported CNBC.
We are entering the phase where global debt markets realized the United States has neither the will, nor the ability to pay back our sovereign debt.
This will cause an interest rate shock to the American economy, which will cause another great depression. We are in the initial stages of this shock now.
Not to give away the ending of 'Currency', but...
The only way for for our nation to rebuild itself is a strategic default, to simply not pay back what we owe, especially to nations that have attacked us with 'unrestricted warfare', namely China.
Luckily, President 47 realizes that bankruptcy is a tool, a way to restructure a company and shed debt.
Donald Trump went through bankruptcy multiple times.
It's going to be a fun 2025.