NOW

 

they are getting you ready 

for what they knew was coming all along.

It's to the:

"Well we cant ignore whats what any more, 

better go ahead and start softening them up a lil." point.

Yep.

Remember?

"The agency (CBO) 

now believes 

the deficit 

will total $18.8 trillion 

over the next 10 years, 

a figure that is 20% higher 

than the agency’s estimate 

last May 

of $15.7 trillion."

(They used the wrong word, the deficit is yearly.

The Debt is cumulative.

Obviously they were talking about cumulative debt 

"over the next 10 years."

From March of last year till now?

We have raised interest rates 4.5%.

That 

(and some other factors)

 increased the CBO's estimate 

of the debt by 20% over the next decade.

You wonder why they are gonna stop at 5.5%-6% regardless?

(And it still wont fix to much $ in the system, it just slows it down some.)

Yesterday’s QE Saddles Today’s Governments With Soaring Debt Costs

"When borrowing costs rise, 

governments end up paying more interest. 

That fiscal blow 

is now landing faster than it used to."

(And that is why the Fed is going to cut of raising rates before they get ever get close to solving the inflation issue.

Somebody (actually an entity using somebody) has been saying this well before any of it ever started playing out. Who was that?)

"The reason: Advanced economies are in effect paying floating rates on a large chunk of their national debts — the result of more than a decade of bond purchases by their central banks.

(Our only real choice to get out of the financial crisis and keep things humming along.)

"And with short-term interest rates rising rapidly, floating-rate debt has gotten expensive."

“The underlying thing is that the state has moved some of its debt from being fixed-rate to floating-rate,” Paul Tucker, a former deputy governor of the Bank of England, said in an interview. “It will be more visible, earlier, in some countries than others,” he said. “But it’s the same everywhere.”

"Under quantitative easing, central banks bought lots of government debt and paid for it by creating reserves — a kind of deposit held by banks. With short-term interest rates at zero or thereabouts, the central banks paid hardly anything on those deposits. Meanwhile, they earned interest on the bonds they held."

"Technically, they were making a profit – except central banks don’t exist to make profits, and generally just refund them to the treasury. So what was really going on was that governments were saving money on their interest bills – some $100 billion annually, in the US case."

‘They’ve Disappeared’

"Now the dynamic has flipped. 

Central banks are still receiving roughly the same amount – but the interest they’re paying out on reserves has soared, in tandem with policy rates. In commercial terms, they’ve swung from profits to losses — which are set to deepen with rates increasingly expected to stay higher, for longer."

"For much of 2022, the Fed’s payments to the Treasury were running at an annual rate above $100 billion. This year, they’ll be close to zero. “Now the Fed’s not going to be rebating anything” to the Treasury, said Dean Baker, an economist at the Washington-based Center for Economic and Policy Research. “That’s an actual burden.”

"It’s a burden that may be especially problematic given that the Treasury is currently constrained by the federal debt limit. The loss of the $100 billion from the Fed could play into partisan budget wrangling."

"In the event that Republicans push for a specific deficit target, Baker said, “part of that story will be: We have this higher interest burden, another $100 billion a year. So that will mean they’ll have to have bigger cuts elsewhere.”

(Here's whats gonna happen, they are going to mandate cuts to social safety net programs just like they always do only this time? It will come at the worst possible time as more and more people are going to need those services.)