That’s rather disingenuous, given prior statements. The only reason that government debt is being so handily funded now is not low interest rates, but the perceived security of holding US debt. As US debt rises, its perceived security falls, based upon nothing more than the prospects of its being payed off via the taxing power of government versus default. Interest rates may rise to whatever level they may and US government debt may still be a good investment, but only absent other alternatives, a point Post No. 11 overlooks. “Other alternatives” include not only other sovereign currencies but, more immediately commodities, which we see not surprisingly, rising.
We can call that condition inflation or we can call it a devaluing of the dollar, but what we cannot call it is irrelevant to the level of US debt. For the moment, we can be quite glad for fiat currency, and the fact that the world’s fiat currency remains the US dollar, for absent that we’d already be Greece. Demand for US Treasury instruments will reach zero, when the US dollar is the functional equivalent of wallpaper. There is a precedent for that. Fortunately, due to the dollar’s position as a universal currency, we have options before that point is reached, none of which involve an elimination of fiat currency. The limitation on those options is that no fiat currency, the dollar included, can ignore commodity prices, which are free to rise in a world market. Gold prices may reflect the dollar devaluation, but oil prices are probably a better indicator of where we’re really at.
The US must either commit to paying its debt or stop adding to it. Either will work, but one must be chosen.