A little cartoon comedy sometimes explains complex ideas best.
Notice that the debt started to grow to finance wars way back in the 1866 and was not paid off by the start of WW1 (1914).
Now the US debt has grown to monstrous proportions, a 100% of GDP, thanks in part to the privilege of reserve currency status.
But look at what is happening to Italian 10 year bonds yields over their German counterparts as Italian debt to GDP reaches toward 120%, a little higher than the US number:
From Bloomberg:
http://www.bloomberg.com/apps/quote?ticker=.IT10:IND
So higher interest rates are something that we will eventually look forward to (or not).
Notice that the debt started to grow to finance wars way back in the 1866 and was not paid off by the start of WW1 (1914).
Now the US debt has grown to monstrous proportions, a 100% of GDP, thanks in part to the privilege of reserve currency status.
But look at what is happening to Italian 10 year bonds yields over their German counterparts as Italian debt to GDP reaches toward 120%, a little higher than the US number:
From Bloomberg:
http://www.bloomberg.com/apps/quote?ticker=.IT10:IND
So higher interest rates are something that we will eventually look forward to (or not).
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