We are there the Govt must choose the dollar or the bond market? 1 One has to lose!
Dollar down = Allows foreigners to buy the massive debt, keeps US economy up, risk on up, at first keeps interest rates down. But in time it stokes import inflation (oil imports), and interest rate pressure in the future.
Dollar up = US bond market falls, higher interest rates, economy and risk on assets get smashed.
This is the formula debt and currency crisis.
1) Fed hikes interest rates to try and slow economy to fight inflation, interest expense for Govt explodes to a forecast of $1.1T in 2023 (red line below), as US debt is 125% of GDP.
2) Slowing economy reduces tax receipts while spending is not reduced, ending in greater us Federal deficit. Forecast to -$2.5T (black line below)
3) The higher federal (govt) interest expense adds to the greater US deficit.
4) The greater the deficit the greater the need to borrow money via the US Treasury market. This is more US Treasury creation while foreigners are NOT buying, and may turn sellers of US treasuries. Foreigners will not buy US treasuries unless the US dollar is much lower (which is inflationary, as US is net importer of oil).
5) The higher the FED hikes interest rates, the greater the Federal (govt) interest expense, the greater the deficit, the greater the need for some one to buy US debt. The greater the need for a lower US dollar to attract foreign buyers.
We are there the Govt must choose the dollar or the bond...
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Last
2.5¢ |
Change
-0.001(3.85%) |
Mkt cap ! $43.31M | |||
| Open | High | Low | Value | Volume |
| 2.6¢ | 2.6¢ | 2.5¢ | $95.76K | 3.715M |
Buyers (Bids)
| No. | Vol. | Price($) |
|---|---|---|
| 15 | 2415779 | 2.5¢ |
Sellers (Offers)
| Price($) | Vol. | No. |
|---|---|---|
| 2.6¢ | 245841 | 2 |
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| Last trade - 16.10pm 30/07/2025 (20 minute delay) ? |
| IVR (ASX) Chart |