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Comment by lr4444lr | Hacker News Reader

Anyone can speculate. If we fail to pay interest in a timely manner, then presumably fewer foreign entities will buy our debt, and we will have less money from debt sales to fund what debt funds. Whether that pain is spread equally or not is anyone's guess.

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If we fail to pay interest in a timely manner is potentially catastrophic. US Bonds are considered a safe haven because we have never defaulted on our debt

The interest is only part of it !

How about paying back the principle when the bond comes due?

The principal is repaid by issuing new bonds at maturity. This can be sustained for a long time if interest rates are low, but for much less time if rates rise. The volume of bonds being issued becomes so great that rates have to be raised to ensure they all find buyers.

It is not as though the US Treasury can afford to wait until it finds a buyer at lower yield. It absolutely must sell these bonds to pay off the principal on the old ones.

It's the payday loan principle. Loan comes due. I pay the interest. And rollover the principle.

Problem is, now we are starting to add to the principle, because there isn't enough cash to cover the interest and keep the lights on.

US bonds are a safe haven because the world’s oil supply is locked up by US warships.

But it isn't. US warships proved incapable of keeping the Strait of Hormuz open. Oil is not flowing.

have you considered that closing the straight may be one of the primary objectives of the war?

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