Personal Finance and Investing

Last edited Tue Nov 22, 2016, 05:12 PM - Edit history (1)

As debt maturities loom, U.S. needs to extend (the average maturity of federal government debt is only 5.2 years) - Reuters, 9/1/11 (followed by a December 2015 update where the situation is virtually unchanged)

http://www.reuters.com/article/2011/09/01/us-bonds-debt-extension-idUSTRE7803QD20110901
The average maturity of marketable U.S. debt ($9 Trillion) is only 5.2 years. 70% of bonds mature in less than 5 years. We're financing long-term liabilities with short-term debt. With such short average maturity, a substantial rise in overall market interest rates will be followed relatively quickly by a substantial rise in interest on the national debt.

I think with historically low interest rates, the Treasury ought to have been -- and be -- financing a large part of the debt with 20 and 30 year bonds.

Big jump in the 10 year Treasury yields since just before the election -- from about 1.8% to 2.3% ... and a corresponding drop in the bond prices (as bond prices move inversely to changes in yields).

Not sure the corporados have a great record on preventing bubbles and collapses. It beats the hell out of me why Republicans, who are supposedly the wealthy investor class and the business owner class (leaving aside their stupid wannabe base), want to go back to wild west financial deregulation that gave us 2 crashes in the past 16 years. With a drop in the S&P 500 of 48% in the first (Dot-com) crash, and a 57% drop in the second (housing) crash. How is that good for wealthy investors and business owners?

Used to be a financial crash was about a once in a generation thing. If we have another crash in the next 9 years, it will be 3 crashes in 25 years, i.e. 3 crashes in a generation.