Soaring National Debt Rattles Monetary Policy as Central Banks Weigh Fiscal Watchdog Role - BigGo Finance
Soaring National Debt Rattles Monetary Policy as Central Banks Weigh Fiscal Watchdog Role - BigGo Finance
Source: BigGo Finance
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DW NOTE
The debt-to-GDP ratio matters only when creditors believe it does. Japan ran 260% for a decade without a crisis because the BOJ bought whatever the market wouldn't. The US is now at 124% with a $1.9 trillion deficit—6% of GDP—and ten-year yields above 5%. That's the difference: Japan monetized in yen that stayed in Japan; dollar debt finances consumption that ends up in Shanghai and Shenzhen. The Fed can choose inflation or insolvency, but it cannot choose stability.