Reuters/Howard Schneider/1-21-2021
“Forget about the amount being borrowed, Yellen, a former Federal Reserve chair, told members of the Senate Finance Committee. Focus instead on the interest rate being paid and the returns it will generate, an approach that argues the country’s future economic potential can support more borrowing today and makes the roughly $26.9 trillion in U.S. IOUs seem less formidable.”
USAGOLD note: Famous last words …… It would be regrettable for investors to forget that the debt – however large – will need to be repaid (with interest), inflated away, or repudiated. One of those options is unlikely. The other two suggest a practical need for portfolio diversification.
Additions to the U.S. National Debt (Quarterly through Q3-2020, in millions of dollars)
Sources: St. Louis Federal Reserve, U.S. Department of Treasury, Fiscal Service
