The Ignorant Investor

So there's going to be a blowout sale of U.S. government debt, and something tells me that the U.S. is going to have to start to raise rates to attract the massive amount of funds it will take to fund our spending:

The US Treasury on Wednesday opened the floodgates of government bond issuance, revealing plans for a record debt sale in February and more frequent auctions in the months to come. . .

In recent years, demand for US government debt has been stoked by developing countries running huge trade surpluses with the US and recycling dollars by buying Treasuries. However, many are facing growing pressure to stimulate their own economies and are seeing their current account surpluses decline as global demand diminishes.

Foreign lenders have problems of their own, and so the credit available to the U.S. government is going to be reduced. To attract borrowers, we will have to raise rates. That's my prediction.

Update: Okay, it's now November and people are still buying our debt in truckloads. I'm not sophisticated enough to understand who is buying all our bonds, but rates are still low, so this prediction turned out to be wrong.