In, The Lowest Common Denominator, we quantified the extent to which growth of consumer, corporate, and government debt has greatly outstripped economic growth and our collective income. This dynamic has made the servicing of the debt and the ultimate pay back increasingly more reliant on more debt issuance.
taking on more debt for spending/consumption and to service older debt has not
been a problem. Over the past twenty years there have been willing lenders
(savers) to fund this scheme, even as their reward, measured in yield, steadily
two of the largest buyers/holders of U.S. Treasury debt (China and the Federal
Reserve) are no longer pulling their weight. More concerning, this is occurring
as the amount of Treasury debt required to fund