美国债务危机临近？长债收益率创20年新高

For years, if not decades, people have been predicting a sovereign debt crisis in the US. That much the disappointment and despite an ever growing debt burden just hasn't materialized. However, last week something happened that really did seem to bring the US a step closer to the brink with the yield on longdated bonds hitting multi-deade highs and other so-called safe havens like gold, Bitcoin, and the Swiss Frank jumping against the dollar.

So, in this video, we're going to explain why the markets are suddenly extra nervy about America's fiscal predicament and what might happen next. You probably heard that the US dollar is the world's reserve currency, but what does that mean? Is it still the case? And what does it mean if it's not the case? We've got a multi-page answer in the next issue of our magazine. That's just one of the articles in our longest issue ever.

Subscribe to get your copy by clicking the link in the description. So, this story really starts last week when the yield on a 30-year Treasury, which essentially tells you how much annual interest the US government has to offer to borrow money for 30 years, rose to its highest level since 2004. Unsurprisingly, this sparks some panic in the US Treasury. Not just because it reflects a growing sense in the markets that the US can't actually pay back its massive debts, but also because long-term yields essentially dictate mortgage rates.

And the Trump administration really doesn't want record high mortgage rates going into the midterms, as well as because higher yields make it more expensive to service your debt, i.e. pay off the interest on your outstanding debt pile. This is already a big problem for the US, which currently spends about 3.3% of its GDP on debt servicing, a 40-year high and more than basically any other large economy. Anyway, on Wednesday, US Treasury Secretary Scott Bessant tried to do something about this, announcing that the Treasury will be doubling buyback operations for bonds dated between 10 and 30 years.

In practice, this means that the Treasury is going to buy about $4 billion worth of long-dated bonds between September 9th and November 4th, as opposed to the 2 billion originally planned. The Treasury buying back its own bonds might feel a bit weird, but we should stress that there's nothing wrong with so-called buybacks in principle. Lots of finance ministries do this sort of thing, usually to provide liquidity to emptier bits of the market.

In other words, to make sure that people who own unusual or unpopular bonds without many potential buyers, can still find someone, in this case the government, to sell to. However, this is obviously quite different because the US Treasury is clearly buying back longdated bonds not to provide liquidity, but to bring yields down. And well, originally it did seem to work. In the immediate aftermath of Bessant's announcement, yields on 30-year bonds fell to a tad below 5.2% 2% down from a recent peak of 5.3.

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