US Erection 12 *AND* 16 *AND* 20 *AND* 22 *AND* 24 *AND* Beyond

[Topper]

They just gave Japan $10 billion to prop up the Yen so that Japan wouldn't sell some of its US bonds. Japan is the largest holder of US bonds.

The Treasury will double the amount of US debt it is currently buying. In essence, printing money.

While US debt is still considered a good investment, there are other bonds that are now competing for investors dollars. AI and Data companies are hiring the bond market to fund their facilities.

The October 2025 to October 2026 budget deficit is projected to be $2 trillion.

The deficit for the month of July, 2026, was $432 billion.

The US is borrowing to make refunds on their illegally collected tariffs. This borrowing to make tax rebates.

Aluminum supply has dropped from six weeks to one week but is still heavily tariffed despite the US needing to import over 60% of its supply for manufacturing.

The NYC Czar of their 9/11 grocery stores is now saying they may subsidize the capitalist dog operated nearby stores that can not compete with the government funded stores.

[5thhorseman]

Covid relief was passed mainly with bipartisan support under both the Biden and Trump administrations.

[Cornuck]

"Little Marco" - fun song.

https://www.youtube.com/watch?v=E-L-pSbtUcs

[BCExpat]

They just gave Japan $10 billion to prop up the Yen so that Japan wouldn't sell some of its US bonds. Japan is the largest holder of US bonds.

The Treasury will double the amount of US debt it is currently buying. In essence, printing money.

While US debt is still considered a good investment, there are other bonds that are now competing for investors dollars. AI and Data companies are hiring the bond market to fund their facilities.

The October 2025 to October 2026 budget deficit is projected to be $2 trillion.

The deficit for the month of July, 2026, was $432 billion.

The US is borrowing to make refunds on their illegally collected tariffs. This borrowing to make tax rebates.

Aluminum supply has dropped from six weeks to one week but is still heavily tariffed despite the US needing to import over 60% of its supply for manufacturing.

The NYC Czar of their 9/11 grocery stores is now saying they may subsidize the capitalist dog operated nearby stores that can not compete with the government funded stores.

What a mess.

[5thhorseman]

The deficit for the month of July, 2026, was $432 billion.

At that rate it will only take 4 years to add the next 20 trillion of debt.

[Topper]

What a mess.

The last time the US economy imploded upon itself dragging many economies around the globe with, the austerity of the Cretian/Martin regimes shielded Canada.

We can not say the same of the Trudeau/Carney years.

[Meds]

Covid relief was passed mainly with bipartisan support under both the Biden and Trump administrations.

The fools at the helm has long been a mostly bipartisan problem.

[rikster]

Annie Dufour (@anniedufour99) lays it out in laymans terms:

“Long-term debt is the single greatest threat to USA’s national security.” Canada is now the 5th largest foreign holder of U.S. debt.
Yesterday I explained how America’s $40 trillion debt and the bond market panic may have forced Trump to blink on tariffs — and how Mark Carney holds a quiet weapon.
Today the full picture:
Japan: $1.12T
UK: $940B
China: $633B
Belgium: $483B
Canada: $460B ← 5th largest foreign holder

The U.S. is more vulnerable than most people realize. Here’s the deeper breakdown

How the US debt problem has empowered other countries, like Canada.
“Long-term debt is the single greatest threat to our national security.”
— Coalition for Fiscal and National Security (May 2016)

Ten years ago, this statement emerged from a report by this committee, composed of distinguished American Republicans and Democrats such as Henry Paulson, James Baker, and Madeleine Albright, at a time when the US debt situation was not as critical as it is today.

Nothing illustrates this better than this comparison.

In 1994, Canada was experiencing a fiscal and debt crisis, to the point that the Wall Street Journal described Canada as “an honorary member of the third world.”
Its ratios at the time were as follows:
Canada 1994:
Debt/GDP: 40%
Deficit/GDP: 5 %

US projections for 2026:
United States 2026:
Debt/GDP: 125%
Deficit/GDP: 7 %

This is clear evidence of the problematic nature—to say the least—of US debt. Let's examine how it weakens US national security and empowers foreign actors, including countries like Canada.
The more US debt increases and the more it slips out of American hands, the less control they have over their own destiny and that of the financial markets.
We saw a perfect example of this in two ways this week.

1 – THE CASE OF JAPAN
The US Treasury had to intervene with its main creditor, Japan, whose currency, the Yen, was on the verge of collapse and, to save it, could have massively liquidated US debt. Wanting to prevent this at all costs, Scott Bessent of the US Treasury bought massive quantities of Yen.
If Japan had massively sold its US debt, the law of supply and demand would have played a huge role, causing bond prices to fall and bond yields to rise, ultimately leading to higher interest rates for all Americans. And the increase would have been catastrophic.
2 – 30-YEAR BOND YIELDS HIT 20-YEAR HIGH

The U.S. Treasury carried out a massive buyback of long-term bonds—issuing short-term debt in exchange—in an effort to cool down 30-year bond yields. This failed to reassure the markets, which remain volatile and who understood what actually happened: the United States swapped the equivalent of a long-term, fixed-rate mortgage for a short-term, variable-rate mortgage, thereby exposing itself far more to market whims, interest rate shifts, inflation, and so on.
“High debt not only crowds out resources that strengthen our security, but it also narrows our tools for dealing with unfriendly nations, leaves our economy more vulnerable to actions of other countries, and weakens our global standing and prestige.”

— Source: Committee for a Responsible Federal Budget, 2022

First of all, who holds this U.S. debt abroad—those other countries mentioned above whose actions can influence the United States?
Japan: $1.117T
UK: $939.9B
China: $633.4B
Belgium: $482.5B
Canada: $459.6B
And yes, Canada comes in at fifth place—what a surprise! In an article yesterday, I explained how Canada had significantly increased its holdings of U.S. debt and how this could offer the country leverage and protection.
“The Russian invasion of Ukraine has highlighted how the global marketplace for sovereign debt has created new vulnerabilities, as countries around the world have frozen Russia’s access to sovereign debt markets. While it is hard to imagine any comparable situation with the United States, this shows how foreign actors can leverage ownership of debt against one another. On a much smaller scale, China may be able to leverage its holdings to create problems in the U.S. Treasury markets.” (source, ibid.)

Since then, Trump has come to power, and the scenario described seems less difficult to imagine. Imperialistic—even conqueror-like—Trump’s America is alienating ally after ally. If this aggressive trend continues, certain allies—let alone adversaries—might be tempted (not maybe to freeze assets, as was done with the Russians) , but to use their sovereign debt leverage to manipulate the U.S.
And you saw from this list that Canada is one of those countries that has accumulated enough U.S. debt to annoy the Yankees...
Now and in the future, since that debt will only keep ballooning.
For the Trump administration has no intention of seriously addressing the problems:

"There's nothing magic about the $40 trillionnumber. And we can grow our way out of that"
— Scott Bessent, U.S. Treasury advisor. ( see video )
A solution that has drawn derision from many experts...
"To genuinely grow your way out of this level of leverage, you would need sustained productivity spikes of 3% or 4%—levels we haven't seen since the post-WWII boom. Relying on that as a policy framework is a massive, dangerous gamble."
— Jason Furman, former Chairman of the Council of Economic Advisers.

Or, as Nobel Prize-winning economist Paul Krugman put it simply:

"The math simply does not work."

What's concerning to me is that there seems to be nobody on the Republican side willing to stand up and take a hard detour and in the case of the very few who have the MAGA electorate vote them out of office the first chance they get.

Kinda scary ...

[rats19]

Some good info rikster

[5thhorseman]

What a mess.

The last time the US economy imploded upon itself dragging many economies around the globe with, the austerity of the Cretian/Martin regimes shielded Canada.

We can not say the same of the Trudeau/Carney years.

How's that? Canada's capital requirements for banks, which is what protected us, have gotten more strict since the GFC.

[Cousin Strawberry]

Thanks Rikster. Fascinating stuff

So are they destroying their own economy on purpose or is this a result of sheer idiocracy?

[Cornuck]

So are they destroying their own economy on purpose or is this a result of sheer idiocracy?

It's hard to say if they honestly believe that lowering taxes (especially for corporations), firing government employees, increasing tariffs, and removing restrictions will truly grow the economy. So far, there's been no evidence that it will happen.

Cutting taxes and expecting the economy to magically grow has been the plan, and that doesn't seem to work. As the post above states, "To genuinely grow your way out of this level of leverage, you would need sustained productivity spikes of 3% or 4%—levels we haven't seen since the post-WWII boom. Relying on that as a policy framework is a massive, dangerous gamble." - not a viable course of action.

[5thhorseman]

So are they destroying their own economy on purpose or is this a result of sheer idiocracy?

Cutting taxes and expecting the economy to magically grow has been the plan, and that doesn't seem to work. As the post above states, "To genuinely grow your way out of this level of leverage, you would need sustained productivity spikes of 3% or 4%—levels we haven't seen since the post-WWII boom. Relying on that as a policy framework is a massive, dangerous gamble." - not a viable course of action.

I would even doubt this assertion. If the debt continues growing at the current rate, doubling every 10 years, you would need to double the GDP every 10 years just to tread water. That's more than 7% growth in the economy per annum! Virtually impossible for the US. Maybe if they print more money to devalue the currency and cause massive inflation. Once everyone has billion dollar bills in their wallet it should be easy to pay off the debt! I'm joking of course but definitely inflation and currency devaluation are part of the solution. Bonus is that Trump will get his much sought after manufacturing jobs, assembling iPhones and Nikes for the Chinese market.

[rats19]

I had no idea Canada held the fifth most debt of the USA.. that’s really quite an interesting fact….

[5thhorseman]

I had no idea Canada held the fifth most debt of the USA.. that’s really quite an interesting fact….

It's mostly due to Canada consistently having a trade surplus with the US. Exporters receive USD and then that eventually gets parked in US government bonds. It's the same for China and Japan which also have trade surpluses.