The newspapers are reporting large-scale decline in sales of United States Treasury bonds.  It is believed that “investors” are losing confidence in the United States as a world economic leader. 

            First, who is doing the selling?  Is it financial firms, like banks and hedge funds?  Is it the central banks of the targets of President Trump’s tariffs (the Peoples’ Republic of China, the European Union)?  There is plenty of evidence that all of these entities are opposed to the tariff policy.  Are they trying to exert pressure on the United States to alter its policy?  Is the government of the United States going to have to yield to this pressure? 

            Second, the government of the United States is in a precarious financial position.  The balance between revenue and spending has been out of whack for quite some time, although it got dramatically worse with the arrival of Covid.  The interest on the national debt has become the third largest government outlay, shouldering its way past military spending. 

            The reason to consider this issue is because the falling market for Treasury paper—like what we are now seeing—is how a financial crash could begin.