Will China start selling our debt? That's worth worrying about, because the lack of a big buyer would probably force U.S. interest rates higher. Already interest on our national debt is projected to rise from 2 percent of GDP, the average that prevailed from 1960 to 2010, to more than 3.5 percent by 2020. It's well within China's power to make that proportion rise still higher.
Dennis Gartman, a long-time commodities trader and observer of the market, who has written the Gartman Letter for 26 years—he's never missed one day!—thinks China won't be a big seller. But he does think China will stop being a big buyer. Especially if China's trade surpluses turn into trade deficits, as unexpectedly happened in February, Gartman writes, China will "slowly, quietly but inexorably wind down its purchases of U.S. debt and will allow its current holdings to mature and run off. There will likely be no aggressive sales of U.S. debt; there simply won't be the buying that there has been in the past…" In other words, we'll get a slow leak, rather than a big boom. Now, isn't that reassuring? Let's hope he's wrong.
That's my to-do list of questions and worries. See you in a month or two.
TODAY IN SLATE
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The All The President’s Men Scene That Captured Ben Bradlee
Is It Better to Be a Hero Like Batman?
Or an altruist like Bruce Wayne?
Driving in Circles
The autonomous Google car may never actually happen.