The Great Repression

The Great Repression Authored by Robert Burrows via BondVigilantes.com, Across much of the developed world, governments are spending an increasing share of their tax revenues servicing debt. Source: Federal Reserve Economic Data The era when debt could rise indefinitely while interest costs remained low appears to be ending. Source: Bloomberg The second chart hints at how this problem may be confronted. Over the last fifty years, debt-to-GDP has risen relentlessly while real interest rates have generally moved in the opposite direction. That relationship is unlikely to be accidental. Highly indebted governments and persistently high real interest...