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Bonds go bonkers as the US government now pays more than Vietnam or Morocco to borrow (markets.businessinsider.com)

submitted 1 year ago by [email protected] to c/[email protected]

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[–] [email protected] 16 points 1 year ago (2 children)

Despite its AA+ credit rating

People do not make fun of the US for having their credit rating downgraded nearly enough. Imagine being the wealthiest country in history with control over the most ubiquitous reserve currency on the planet and the credit rating agencies are like “it’s not that we don’t trust you, but we have standards to maintain.”

[–] [email protected] 7 points 1 year ago

This really does need to be talked about more than it is. Norway, Sweden, Canada, and the Netherlands all have a better credit rating than the US.

The fact that Ted Cruz hasn't been hounded out of the country for that shit baffles me to this day.

[–] [email protected] 2 points 1 year ago (1 children)

The ratings agencies basically said a Republican Congress and a Democratic President is the biggest risk to debt repayment. It isn't that the government doesn't have the money, but that it won't spend it.

[–] [email protected] 2 points 1 year ago

That’s the point. The US has effectively unlimited money, or let’s say unlimited liquidity, so their ability to repay is purely based on political issues. That they can’t get their shit together enough politically to avoid their own borrowing costs going up is extremely funny and embarrassing.

[–] [email protected] 7 points 1 year ago

Vietnam and Mexico could take advantage of the arbitrage opportunity (sell domestic bonds, buy US bonds), but clearly aren't because they think there's no edge?

That's... Pretty crazy. Doesn't bode well for US inflation.