The Peter Zeihan Podcast Series The Fire Hose of Chaos: Government Debt
Apr 30, 2025
Foreign investors are shifting away from U.S. T-Bills, raising questions about the future of government debt. The discussion explores how fluctuations in investment, especially from China, compare to historical economic issues. Surprisingly, it reassures listeners about the overall stability of U.S. debt. The session also delves into the vulnerabilities of the U.S. dollar amid global economic challenges, emphasizing how the Federal Reserve plays a crucial role in sustaining its resilience.
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Impact of T-Bill Sell-Off
- Foreign investors selling US T-bills caused a sharp rise in U.S. debt financing costs.
- Small interest rate changes heavily impact the $36 trillion U.S. government debt.
UK Debt Crisis Anecdote
- UK's Elizabeth Truss tried funding tax cuts by debt, hoping growth would cover it.
- The market crushed the pound, ending her premiership within days.
US Dollar as Global Baseline
- US T-bills remain the global baseline for financial instruments despite challenges.
- Losing the US dollar's global currency status would be a far bigger problem.