The US government is plunging deeper and deeper into debt. To finance this, the US Treasury has been firing billions of new government bonds into the markets over the past few months. The question is: can the global markets absorb this flood of new debt?

Personally, I think so for the near future! The bond market seems stable, interest rates remain stable for the time being and the drama surrounding the Yen also seems to be under control, or so overshadowed by geopolitical concerns that the serious frictions in the global debt markets are no longer on the minds of the markets and their participants. The Treasury will thus continue to satisfy the global hunger for dollars as collateral, without initially causing any major damage. Surprisingly, even the US bonds that Japan recently threw onto the market in the course of its currency intervention or the Chinese sell-off are finding other international buyers. However, it is doubtful whether this can remain the case in the long term. It's always good to be prepared...