Q: Hi
I know that this question is almost impossible to answer and it is anyone's guess but what is the end game for this mounting debt in the US? 34 trillion? Perhaps 10 trillion of that is domestic? Still a stagering number. GDP is 26.24 Trillion with that volume it sounds manageable but they and other goverments dither about, eventually kicking the can down the road. At what point does this come to a head in your opinion? Perhaps a year or an event that you see as an epoch?
Thank you
J
I know that this question is almost impossible to answer and it is anyone's guess but what is the end game for this mounting debt in the US? 34 trillion? Perhaps 10 trillion of that is domestic? Still a stagering number. GDP is 26.24 Trillion with that volume it sounds manageable but they and other goverments dither about, eventually kicking the can down the road. At what point does this come to a head in your opinion? Perhaps a year or an event that you see as an epoch?
Thank you
J
5i Research Answer:
A bit of inflation should help make this more manageable as would economic growth. It is a risk we have heard and seen for many years (decades?) now and it never has really amounted to a whole lot or at least any sort of thesis we think was actionable. As long as the US remains a world power, we think there will be demand for their debt. If that standing changes, then maybe it could become more problematic, but that also likely means there are bigger issues than debt at that point.