What happens when the Fed has an auction and nobody shows up?

Yesterday, yields on treasuries jumped from 3.51% to 3.78%. That hasn’t happened since 1980. What happened? Well, the big news is that the Chinese didn’t show up. So they didn’t buy any of our debt. Neither did pension funds or insurance companies. Uh oh. This could be bad. If what we have to pay to service our debt goes up too much, we will be in much worse shape than before. Our interest payments will eat up more and more of our budget. Here’s to hoping that we can keep those prices down…

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