Name: The Dollar is Losing Control As Washington Loses Control Over The Bond Market
Uploaded: 2026-03-08T18:02:49.000Z
Duration: 12 min 39 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

The US national debt is getting out of control and we have to talk about it.

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The Congressional Budget Office has just released their projection for the next 10 years.

Basic passive voice

And the national debt is expected to cross $63 trillion by 2036.

For comparison, that number today stands at $38.5 trillion, which is really enormous.

Which means that the US government will have to find somebody that will loan the US government about $25 trillion.

The US government does not pay off its debts.

And that means that nobody actually knows how the government will raise another $25 trillion over the next 10 years.

The national debt could be divided into two categories, the public debt and the intra governmental debt.

Intra governmental debt is when the government owes money to itself.

So, so one government agency owes money to another government agency, even if we exclude that because it's impossible for the government to go broke when it owes money to itself.

If you just take the public debt, the total public debt by 2036 is expected to cross $56 trillion and a debt to GDP ratio will be 120%.

And that's because the US national debt has has crossed a point where it will continue rising from now onwards exponentially.

Just like when you start investing, it is really difficult in the beginning, but

the moment you hit $1 million in your investments, your million dollars are going to grow exponentially.

But the same thing happens when you owe debt.

So the real question at the end of the day is that how the government can raise so much money.

There are three major types of categories who buy the US national debt.

Foreign countries and foreign companies often invest in the United States because they make a lot of money in the US So if you are a Japanese business doing business in the United States and you made so much money, you plan to grow your business in the U.S.

so you're going to take a portion of your money and you're going to buy the US Treasuries because if you keep them in US dollars, there is inflation.

Your money loses value, which is why you are going to buy U.S.

treasuries and consistently receive interest from the U.S. government.

About 15 years ago, around half of the entire U.S.

national debt was owned by the foreign countries and foreign companies.

Today, that number has plummeted to less than 30%.

So just by looking at this chart alone, you can see that this number will continue falling down.

And, and foreign countries and foreign businesses have less and less appetite in the US debt.

Maybe because they don't trust the United States.

And because Donald Trump had successfully ruined United States relationships with many other countries, including the closest allies of the United States, including the countries that own a lot of the US national debt.

I don't think they trust the United States more now.

So we can't actually expect foreign countries to buy more.

The second category or the type of investors in the US Debt are Americans.

If you want to operate a bank in the U.S. you must buy U.S.

treasuries, because U.S. treasuries are considered safe haven assets.

So if you're a bank, you must have these investments just in case.

If depositors will come back asking for their money, you.

You can easily turn U.S. treasuries into cash and pay your depositors.

Besides banks, we also have hedge funds and pension funds.

They invest in wide variety of type of assets.

A portion of that goes into the stock market, maybe the real estate.

But because US Dollars or the US Treasuries are considered safe haven assets, you must invest a portion of your investments into safe haven assets as long as they pay you an interest rate or a yield that is higher than inflation.

So if inflation is 3%, then you're expecting maybe 3.5 to 4.5% from the US government.

The third major investor in the US debt is the Federal Reserve.

Unlike the first two types of investors, the Federal Reserve is part of the US Government, but

And the job of the Fed is to stabilize the U.S. economy.

And when the Fed buys the U.S. treasuries, it does not do that from earning money.

So every time you hear the news that the Fed has purchased U.S.

treasuries, you have to understand the most important thing that the Federal Reserve just now has printed money and bought the U.S.

treasuries or gave a loan to the U.S. government.

dollar in the market is treated like any other commodity and its value derives from its scarcity.

It's filled outside and nobody cares about it because there is just so much of it.

But you don't see much gold outside because it's scarce.

So the Federal Reserve manipulates the value of the dollar through scarcity.

But what happens when the Fed throws more dollars into the economy?

Of course, the scarcity of the dollar plummets will, which means that your dollars are going to worth a lot less.

So since the inception of the Fed, the Federal Reserve has increased its balance sheet.

Now it has about $6.6 trillion worth of assets.

About $2 trillion of that are mortgage backed securities.

Because the Federal Reserve has also been subsidizing the housing market.

And about $4.6 trillion of that are the U.S. treasuries.

So the Federal Reserve owns about $4.6 trillion of the U.S. debt.

If you look at the projection of the CBO, you will see that over the next 10 years that number is going to grow from $4.6 trillion to $9.5 trillion.

Since the inception of the Federal Reserve up until today, the the Federal Reserve has purchased or gave a $4.6 trillion loan to the US government or printed this much money and threw it into the economy.

But within just the next 10 years, between 2026 and 2036, it is going to double that.

So that number is going to cross $9.6 trillion according to this estimate.

What is going to happen to the value of your dollars, to the value of your savings, to your wages when the Federal Reserve is going to double the amount of dollars in the economy?

This sounds like it's not going to happen.

But if you literally just pull out the chart and you see how much the dollar loss of its value since the Federal Reserve was created, you can see that it already lost like 97% of its value.

So the fact that it's going to lose another 50% of its value over the next 10 years is not a surprise at all.

Because this is just one tiny part of the entire problem.

treasuries, especially 30 year government bonds, there are going to be higher mortgage rates.

How are my mortgage rates related to the US Government borrowing money?

You see, the entire financial market is one huge bazaar.

That means that investors are looking for better deals.

The lower the risks, the lower are going to be the returns.

The higher the rates, the higher are going to be the returns.

Because the US Government is the safest investments in the world.

Because it's considered a safe haven asset.

Which is why the U.S. treasuries offer the lowest yields in the market.

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The Dollar is Losing Control As Washington Loses Control Over The Bond Market

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