Heard on the Street: For Treasurys, It's All in the Timing - WSJ.com

Heard on the Street: For Treasurys, It's All in the Timing - WSJ.com:

"Perhaps one should also consider the fact that the US Treasury and most other developed country governments are in the market for huge amounts of capital.

True, on one side they crowd out private borrowers (plus, of course, their fiscal policies discourage private investment); but, on the other side, the very scale of their ongoing borrowing is like lending to an over-leveraged consumer. In other words, the rate demanded goes up.

And, as suggested by the following geopolitical commentator, one has to ask whether when rates start to go up (which is already happening), governments will resort to buying their own debt (e.g. the US and UK) to try to avoid a second downturn in the economy (read: inflation); or, they will let rates risk and further reduce and raise the price of credit for job creation?

My guess is the government will have the central bank create the dollars to try and hold down interest rates. Thus, the situation is far different than presented in this article.

See: YouTube - Philippa Malmgren on Geopolitics"