The future of the dollar

Weak Treasury Auctions Raise Worries About US Debt Burden

The U.S. Treasury sold $39 billion in five-year debt Wednesday in an auction that drew poor demand, raising worries over the cost of financing the government's burgeoning budget deficit.
It was the second lackluster showing in as many days, convincing analysts that the stellar results of debt auctions just a few weeks ago were a fluke and that Thursday's $28 billion seven-year offering could suffer a similar fate

Essentially to get the bonds to sell, they had to raise the rate of return. You may ask yourself, what does this mean?

The tail indicates that dealers drove an unexpectedly hard bargain to raise yields, and lower prices, to buy the bonds. Ultimately, this could raise interest rates throughout the economy at a faster rate than might be appropriate given the lingering effects of the worst recession in decades.

Inflation is what it means. The bond market is eyeing turning our triple A rating to double A and that would mean we would have to offer higher rates to get the bonds sold. That is what happens when you borrow money to buy shiny things and then borrow more to pay back the previous debt. Our dollar will fall against other notes and your paycheck buys less. Tell the idiots in Washington to stop spending and start paying our debt off. I can drive over a few potholes if it means that we get back on firm financial footing.