Other Than That, Things Are Fine!

Just the (very) brief intro to a study entitled "Financing US Debt: Is There Enough Money in the World? And at What Cost?"

You've been warned.

With the outlook for continued U.S. budget deficits and growing debt -- and the uncertainties regarding their financing -- we examine the role of foreign official holdings of U.S. Treasury securities in determining Treasury security interest rates, and the resulting implications for international portfolio allocations, net international income flows, and the U.S. net international debt position. We update estimates of the relationship between Treasury interest rates and U.S. structural budget deficits, and extend that empirical analysis to include foreign official and Federal Reserve holdings of U.S. Treasury securities. Although relationships suggest that the world portfolio could potentially accommodate financing requirements over the intermediate horizon, substantial uncertainty surrounds the likelihood of that accommodation and the associated effects on interest rates and adjustments in international portfolios. Notably, unprecedented levels and growth of foreign official holdings of U.S. Treasuries will
be required to keep longer-term Treasury security interest rates from rising substantially above current consensus projections.

Prolly not on the "must-read" list of B Hussein Obama, PissyPants-in-Chief.

HT: RenMan