Something will have to give, and on an increasingly more proximate timeline, although we have no idea when that timeline runs its course...
In basic terms, U.S. bond yields are only sustainable as long as:
- There remains a market-wide faith that the U.S. government will not deflate itself out of the fiscal mess it has managed to run, virtually uninterrupted, since at least 1980 on;
- there remains a regulatory coercion into the U.S. government bonds being "risk-free" capital "instruments"; and
- there remains vast appetite for the U.S. dollar as the store of value instrument for