US Debt is getting more Expensive for the Taxpayer while the US digs itself in deeper

News came out yesterday that shows the US Treasury Bonds yields are going up at a record pace. Well, these yields are not fixed and are set on an open market based on demand - the more demand, the less the yield and vice versa.

For the US taxpayer, it means that the price of funding their enormous debt (11 Trillion Dollar) is becoming more expensive (a lot more…) and if the trend continues, it will inevitably have a stark impact on the value of the dollar.

Just think, for every 100 Dollars the US borrows, it now needs to pay back 104.35, for every 1,000, it needs to pay back 1043.50, for every million, it needs to repay 1,043,500, for every Billion, the cost is 1,004,350,000 and for every Trillion the number is 1,004,350,500,000. Translate that into the 11 Trillion Dollars that the US is in the hole for, and you’ll get an annual interest rate of 47,855,500,000 US Dollars. I’d say we have a bit of a problem here…

If you take that staggering number of almost 48 Billion Dollar payment, and divide it among the 350 million US taxpayers, it totals about $178 per person – to pay back the principle, it would cost almost $32,000 per person – more than average annual wage for an American. So the question on the minds of Forex online traders is “how is this going to work if the US does not devalue their currency to offset these costs?”