If the US paid $8B towards it debt every _day_ it would take over thirteen _years_ (completely ignoring interest accumulation, which isn't realistic) to pay off $38T in debt.
I don't see how this is huge in context, it is indeed symbolic.
Please don't get me wrong here, I am neither advocating the selling or not selling of US bonds. This specific sale just isn't statically significant in a vacuum. If this precipitates a snowball effect of bond-selling, completely different story.
Regarding your last sentence, this isn't happening in a vacuum, and rejecting the risk-free assumption behind US debt seems like a symbol with a lot of information content.
Same point. It would need to increase by: an order of magnitude AND happen every day before it becomes a problem. $8B (actually $260m) isn’t moving markets. $80B/day for a month, that would move the needle.
I understand why people want this to be a bigger deal. It just isn’t. Not yet.
> If the US paid $8B towards it debt every _day_ it would take over thirteen _years_ (completely ignoring interest accumulation, which isn't realistic) to pay off $38T in debt.
> I don't see how this is huge in context, it is indeed symbolic.
I think if you approach the average new home buyer and said "We've reduced your bond repayment term to 13 years. Your monthly repayment will not increase" they will certainly consider it more than symbolic.
IOW, 13 years to payback is nothing compared to what we usually see for PE ratios of a bubbling stock, or repayment terms on a large loan, etc - it is definitely much much more impactful than you think.
> This specific sale just isn't statically significant in a vacuum. If this precipitates a snowball effect of bond-selling, completely different story.
I think that's the problem here - we're (all the commenters) trying to determine if this is the first pebble that starts the avalanche. All bank runs (in this case, a run on the debt in US dollars) starts with small but significant withdrawals (i.e. selling your dollars for some other money) that indicate to other holders to get their money out while it is still there to be gotten.
I think we agree with each other. They borrow more than this paltry amount every single day and nothing changes. Selling less than the daily borrow amount, exactly one time, is a rounding error at best.
