Carol Roth

So we are in this crazy, crazy situation.

And the problem becomes that because of our tenuous financial situation and a bunch of other things that are going on in the world, there aren't as many buyers that are coming in to buy us.

our Treasury securities, what we issue to issue more debt into the markets, right, to pay for these deficits.

And so there aren't as many buyers who are just buying them because they always have to.

You know, things like central banks around the world, they're getting sick of us and our shenanigans.

And so right now, everybody who's buying that is price sensitive.

So they're looking at things like potential inflation and what's going to happen in the economy, and plus the supply and demand, because every time we run a deficit, that puts more supply of bonds into the market.

So supply and demand, right?

So our interest rate keeps going up.

Even when the Fed cuts what their target rate is, that's for short-dated securities, something like a month or a couple of months, right?

But for the longer end of the curve, the yield curve, things like 10-year and 20-year and 30-year treasuries, the market is making those decisions.

And so regardless of whether it's Powell or Warsh or whoever, they're sort of beholden to what the market is saying, which is why we've seen the yield on the 10-year stay stubbornly high, even though they continue to cut their target interest rate.

So my concern in this overall situation is that we're going to be put into a situation where the realities continue to push up that that yield that we have to pay on our interest.

And that means our interest costs go up.

And if our interest costs go up, that means our deficits go up.

And if our deficit goes up, that means we have to finance more debt, which means we have to put more debt into the market, which does what?

It pushes up the yields because now we have additional supply in the market.

So it ends up in this crazy debt spiral.

So the reality is at some point here, there's going to be no choice anymore.

Unless we want like the world's global markets to blow up, we're going to end up seeing the Fed probably with the Treasury, whether it's directly or through one of their things that they call something else.