Fed Barkin: America's rising debt will eventually face “liquidation”

On 26 August, the Fed indicated that if United States debt continued to climb, it would eventually face “liquidation”, but it was difficult to predict when that would happen. When asked about the fact that the total public debt of the United States exceeded $40 trillion, Balkin stated that the Government could continue to borrow as long as the public continued to buy the national debt. He added, however, that investors might begin to resist. Balkin said: “As events unfold, this will eventually face liquidation. Only no one can predict a specific time, and we have a global currency and rule of law system — that is why people keep buying our debt. But you know, one day people will stop buying your debt, and that's the current risk.” In addition, Barkin reiterated his statement earlier this month that interest rates should remain stable in view of evidence of declining inflation, while acknowledging that if price pressures become entrenched, policymakers may have to raise interest rates。