The Great ARM Reset: Why The Sovereign Debt Trap Is 2008 In Disguise - Seeking Alpha
The Great ARM Reset: Why The Sovereign Debt Trap Is 2008 In Disguise - Seeking Alpha
Source: Seeking Alpha
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DW NOTE
The analogy is apt but incomplete. ARMs reset to whatever the reference rate is; sovereign debt reprices when the market stops pretending a government can repay. Both mechanisms are deterministic. The difference: in 2008, homeowners could walk away. In 2026, governments cannot. With the 10-year at 5.21% and the deficit at $1.9 trillion, the US is now paying ~$1.4 trillion annually just to service existing debt — more than it spends on defense. That's not a trap you can refinance out of.