A mass selloff of US bonds will mean that the US can’t sell any more - because the market is suddenly flooded with bonds at a ‘discount’. This means that the US can’t take on any more debt (borrow money)
Why would you pay the US $10 when you can get the same thing from France for $8?
Or the US then has to issue bonds with massively inflated returns - i.e. pay a much higher interest rate.
Why would you pay the US $10 when you can get the same thing from France for $8?
Or the US then has to issue bonds with massively inflated returns - i.e. pay a much higher interest rate.