It’s official: the Department of Treasury is now issuing debt at pandemic levels. It’s worth noting the pandemic record was double the previous record, which had stood for 231 years.
In raw numbers, the latest numbers for Q4 2023 show Treasury issued $7 trillion in new debt. For the entire year, it came to $23 trillion.
This has bloated the Treasury market to $27 trillion — up 60% since the pandemic. In other words, one third of Treasuries have fresh ink on them. And it’s up roughly sixfold since the 2008 crisis.
Meaning if we hit another crash, it could be a lot bigger.
At this point, federal debt is rising by $1 trillion every 90 days, and US government spending as a percent of GDP is at World War II levels.
Given we’re not in a World War — in theory — nor are we in a pandemic, why so much debt? Easy: it’s buying growth.
Or as Balaji Srinivasan puts it: “The economy isn’t real. It’s propped up by debt. They will fake it till they break it.”
Even the Wall Street Journal, which loves debt, is sounding the alarm, writing that rapid growth in debt often ends badly, and given the enormous size and alleged safety of the Treasury market any “instability” could be catastrophic.
Why catastrophic? Because US Treasuries are treated like cash by everything from banks to pension funds to large corporations and individual 401k’s. A Treasury is seen as cash that pays interest.
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