A RECIPE FOR STABILIZING OUR WEAKENING BOND MARKIET AS OUR NATIONAL DEBT SURPASSES $40 TRILLION WITH TOP ECONOMIC MINDS WARNING WE NEED TO “GET AHEAD” OF THIS “PENDING DEBT CRISIS” BEFORE “IT FALLS INTO ONE’S LAP”

As “alarm bells” continue to “ring” as Our National Debt now surpasses $40 Trillion Dollars—”Billionaire investor Ray Dalio warned that the U.S. Treasury market could face weaker demand from China and Japan, as the two major foreign creditors seek to reduce their exposure to U.S. debt.

The Bridgewater Associates founder said the U.S. relies on foreign capital for about a third of its debt, with a significant portion coming from Japan and China, during a Bloomberg Television interview in Singapore on Tuesday.”

Further stating, ”Japan, the largest foreign holder of U.S. Treasuries, and China have already been reducing their holdings. Japan’s Treasury holdings fell by $12.8B in July to $1.1T, while China’s official holdings have declined to about $618B from a peak of $1.3T in 2013, according to the Bloomberg report.”

And—” When it comes to national debt, the main lesson hawks want to impress on policymakers is the cost of inaction: how much the public will ultimately have to pay if officials don’t address deficits.”

Now about Jamie Dimon>>

“Jamie Dimon, CEO of JPMorgan Chase, has echoed this warning in the past. It’s better to get ahead of a crisis than wait until it falls into one’s lap.”

“I’m not that worried” about debt levels, Dimon said. “We’ll be able to deal with it. I just think maturity should say you should deal with it as opposed to let it happen. The way it’s going now, there will be some kind of bond crisis, and then we’ll have to deal with it. It will be okay. It’s just not the way to do it.”

“Debt hawks are backing a policy target to reduce deficits to 3% of GDP, around half of where they are now.”

With this mind, “Maya MacGuineas President for the Committee for a Responsible Federal Budget [earlier] appeared on Bloomberg News to discuss a wide range of fiscal topics – the crossing of a $40 Trillion Dollar National Debt; the implications of high and rising deficits on our economy, interest rates, and bond yields; the need to address all areas of the federal budget, including ailing trust funds [such as Social Security]; and how lowering deficits is the “single most important thing” policymakers can do to address affordability concerns.”

“Maya MacGuineas, president of the budget watchdogs at the Committee for a Responsible Federal Budget, foresaw this latest milestone in an earlier statement, noting that government overspending in July alone had set a pace of $14 billion in new debt every single day.”

Further stating, “We are already feeling the consequences of this extreme borrowing — high interest rates, trillion-dollar interest payments, and looming trust fund insolvency that threatens benefits for Social Security and Medicare,” MacGuineas wrote as she called for lawmakers to try to find a way to reduce [budget] deficits to 3% of GDP. (That figure currently stands at 5.8%.)”

ALSO on Bloomberg News, earlier in the year, CBO’s (Congressional Budget Office’s) Director Phillip Swagel had appeared, voicing concerns about our rapidly rising then $39 Trillion Dollar (Gross) National Debt, also discussing the CBO’s Emergency “Break Glass” Plan intended to counter the “Next Economic Shock” which can be viewed at https://www.crfb.org/papers/break-glass-plan-next-economic-shock

On March 17, 2026, the gross national debt had exceeded $39 trillion for the first time and the CBO estimated that gross debt will rise to $63.7 trillion by the end of Fiscal Year (FY) 2036. Also, the yearly deficit in fiscal year 2026 totals $1.9 trillion and will grow to $3.1 trillion in 2036. And this is important–Relative to the size of the economy, the deficit is 5.8 percent of gross domestic product (GDP) in 2026 and will increase to 6.7 percent in 2036.

NOW HERE’S WHAT THIS ARTICLE IS CONCERNED ABOUT>>

When we are finally getting a plan before Congress and passed or even before that where, if or when, Foreign Governments and a sufficient number of other investors, for whatever reason (such as the serious (competitive) investment in AI (Artificial Intelligence) and development of Data Centers and unfortunately also from the friction Trump has created with Canada and many of our other trading partners causing them to start and/or increase their trading with China thereby minimizing their financial ties with the U.S. which very well could include “later on down the line”, the buying of our Treasuries) and as a result, our trading partner-nations then, let’s say, dramatically “cut down” on Treasury bond purchases from us (or in some cases “God-forbid”, stopped buying our bonds all together), hence, causing The Treasury to have to (drastically) raise yield rates to attract enough buyers “to fill the void” causing Treasury debt servicing costs to “shoot up” and if that wasn’t enough, that if we got to the point where to attract the necessary purchasers to maintain adequate funding for The Treasury to conduct “business”, The Fed THEN had to START PRINTING MONEY JUST TO PAY OUR BILLS (called Quantitative Easing) thereby causing The Dollar to (begin to) de-value as well creating further additional “panic” amongst Foreign Governments and other investors causing them to question whether to purchase additional Treasuries (or any at all)–we would be “in a world of hurt” and frankly at that point, it “would be ALMOST too late” to do “anything about it” as “the dam (figuratively) would have already burst”!!!!! So, to best protect ourselves, it would be extremely advisable “to say the least”, have some kind of preventative measures already in-place, should “the worst happen”!!

Now, one way (i.e., Stablecoins though this by itself probably won’t be enough and should be supplemented by the method and main focus of this article to be discussed in detail next) “to fill the void left by disenchanted governments” because of China’s and Japan’s (our two biggest bondholders) threat to sell their Treasuries and because of Trump’s continuing treatment of our trading partners and to prevent a potential WHOLESALE bond sales threat by a collective of foreign nations should such ever materialize would initially “as it stands now” and which is presently “in our tool-kit’ WOULD be Stablecoins which are cryptocurrencies backed by short-term U.S. Treasuries. Total stablecoin market capitalization reaching $308.0 billion as of August 13, 2026” with projections suggesting Stablecoin use could be as much as $2.8 trillion by 2028 with a further projection of $5 trillion by 2035.

However, in lieu of our present budget overruns and annual deficit of $1.9 trillion for this year and projected to increase to a whopping $3.1 trillion by the year 2036 per calculations by the CBO (Congressional Budget Office), we would need a cumulative $23.1 trillion over the next 10-year period from 2026 through 2035 to counteract these continuing annual budget overruns and Treasury debt servicing costs. THIS with Annual deficits growing from $1.9 trillion to roughly $2.5 to $2.7 trillion per year by 2035. Far less than the $5 trillion cumulative total by 2035 that Stablecoin reserve funds (which, as stated, are backed by short-term U.S. Treasuries) COULD EVER PROVIDE compared to this cumulative $23.1 trillion total over the 10-year period from 2026 through 2035!!!

NOW, HERE’S THIS ARTICLE’S MAIN FOCUS & PROPOSAL ABOUT STABILIZING OUR WEAKENING BOND MARKIET AS OUR NATIONAL DEBT SURPASSES $40 TRILLION SHOULD FOREIGN GOVERNMENTS AND OTHER INVESTORS STOP OR DRASTICALLY REDUCE THEIR PURCHASES OF U.S. TREASURIES>>

NOW Another way “to fill the void left by disenchanted governments” should Stablecoin use not be enough (by itself) AND to better keep up with our expanding National Debt would be to require domestic importers to purchase U.S. Treasuries with a certain percentage (say 10 to maybe even 15 percent) of their sales when importing goods here–therefore, in essence, creating a NEW 3rd class of U.S. Treasury purchasers!!

To give an idea of how much we import—”The United States imported approximately $388 billion in goods and services in June, 2026 down slightly from $395 billion in May, with total annual goods imports running over $3.3 trillion per year according to official U.S. Customs and Border Protection Trade Statistics.”

Now say with 10 to 15 percent of their sales when importing goods become devoted to bond PURCHASES this would amount to roughly $330 Billion to $495 Billion per year!!!! With this $330 Billion to $495 Billion per year in bond purchases amounting to a cumulative estimated total of $3.30 Trillion to $4.95 Trillion in bond PURCHASES over the next 10 years by our domestic importers which (1) could be kept and collect Treasury bond yields or (2) better yet, they could “turn around” and re-sell these bonds on the open secondary bond market to institutional bond buyers most of whom routinely attend Treasury Bond Auctions and sell these bonds for say 90% for what they originally paid to obtain these bonds.

Fact is institutional commercial bond buyers would be extremely interested in “relieving” these domestic importers of their bonds and the bidding amongst them would hence be very competitive and probably go up to as high as 90 or even to 95 cents (“on the dollar.”)

But wouldn’t someone just offer, say, 50 cents “on the dollar”? Well, let’s say that’s true! But then again, someone else would then offer 60 cents “on the dollar”, then another 70 cents, then yet still another, 80 cents “on the dollar” and still make a profit!! But couldn’t these major institutional bond-buyers get together and agree to offer domestic importers say only 60 to 65 to 75 cents “on the dollar”? That would be patently against the FTC’s (Federal Trade Commission’s) anti-trust, anti-competitive laws that have “been on the books” for years which prevent “price-fixing.” That is, sellers industry-wide can’t “gang-up” and agree to all sell at a “fixed” high price nor can (they as) potential buyers “get together” and only offer to buy at lower than fair market prices.

And again, with this high 90% re-sale price these domestic importers could get and re-investing this money back into their business and they would make a much more reasonable and substantial profit!!! This would be the more probable outcome of what our domestic importers would do with their mandatorily purchased bonds. More on this later.

Now, some background information:

As it stands now, there are two (2) main groups of bond purchasers–domestic institutional investors such as banks, retirement-pension funds and insurance companies, with the second class of large-scale bond purchasers being foreign governments. But because of their present concern over our rising National Debt, they are now buying less and are also investing more in developing their own country’s infrastructure and economy and that of their trading partners. A prime example being China’s Belt and Road Initiative. Also, we must take into account China’s rapidly growing Economy and the development of BRICS, the new trade alliance between Brazil, Russia, India, China and South Africa and their trading partners and neighboring nations these BRICS countries have trade relations with.

That’s why it’s ESPECIALLY CRITICAL that we do something NOW to STABILIZE OUR TREASURY BOND MARKET!! That is, with a large-scale third class of U.S. Bond purchasers also being required to be a MANDATORY class of purchasers, this would stabilize the U.S. Bond Market giving “guaranteed” relief and confidence to domestic institutional investors and foreign governments AS WELL! This way, there would always be, as a result of this New 3rd class of bond buyers, the required minimum of cash reserves The Treasury would need to make scheduled payments and for current government expenditures coming due. This, alone, would stabilize the bond market and act as a “hedge” against (AND ALLAY) any fears causing large scale selloffs or future non-purchases of U.S. Treasuries by foreign governments or domestic investors fearing a loss of value to their investment!!

Also, with this New 3rd class of bond buyers and this is VERY IMPORTANT, this would STABILIZE our Bond market, that is, making the Treasury less dependent on their bond auctions not having to sell as many Treasuries, otherwise not “being put in a position” to sell at higher yield rates to meet their needed quota thereby saving on debt servicing costs!!! Just to give an example, our debt servicing costs on outstanding bonds this year was a trillion dollars!! Fortune Magazine reports that 19 percent of our National Budget, as of now, is spent on Our Debt and If the Treasury was forced to pay higher yields, debt servicing costs could soar to over 2 trillion per year!! And if interest rates ever climbed to 18-20 percent as they did in the days of Carter BUT WITH A $40 TRILLION DOLLAR DEBT INSTEAD, we could be looking at $3-4 trillion per year in debt servicing costs!!!

And with The Supreme Court’s ruling on Trump’s reciprocal (Liberation Day) tariffs as being unconstitutional in that it’s actually a tax and therefore solely within purview of Congress, The Court struck down Trump’s authority to impose tariffs through the International Emergency Economic Powers Act (IEEPA). except for limited exceptions under Sections 232, 301, 338 and Section 122 and also ordered Trump to refund upwards of $166 to $175 Billion to those importers who paid these reciprocal (Liberation Day) tariffs.

And now with this in mind, and whether the Republicans stay in power and continue with Trump’s tariffs in its scaled-down form and now googling to get a better picture of what Trump’s tariffs in its scaled-down form looks like:

Section 301 & 338 Tariffs Replace Less Than 60% of Lost IEEPA Revenue

Conventional Estimates of Net Tariff Revenue Impact Through FY 2036

And with our present war and situation with Iran and the price of gas, jet fuel and now especially diesel all “jacked up”, the prices for which are all still “going through the roof”, and also inflating the price of food, goods and services “across the board”, “Inflation and high living costs have added thousands of dollars in extra yearly expenses for the average U.S. family, permanently lifting the baseline cost of everyday goods and services. Congressional Joint Economic Committee estimates show that recent inflation forces the average American family to spend roughly $2,300 to $3,500 more per year on the same basket of goods and services.”

This again being attributed in large part to Trump’s tariffs BUT, “here’s the deal”—if we switched over to requiring domestic importers to purchase bonds versus being tariffed, a lot of that inflation would disappear and here’s why–

As alluded to earlier–Fact is institutional commercial bond buyers would be extremely interested in “relieving” these domestic importers of their bonds and the bidding amongst them would hence be very competitive and having a free-market (bidding) system, basically the bidding would probably go up to as high as 90 to 95 cents (“on the dollar”) as such domestic importers would also be buying imported goods several times a year thereby also buying Treasuries multiple times a year with these institutional commercial bond purchasers (further) seeing that even at 90 to 95 cents, a reasonable profit could still be made.

But even at this relatively minor 5-10 percent loss of say the 10 to 15 percent levy on what they pay for their imported goods therefore amounting to 5-10 percent of 10 to 15 percent of what they pay for these goods equaling a half percent to one and a half percent of the total sales costs to the domestic importer, admittedly a relatively miniscule amount, wouldn’t that still, in some way, be a “tax” that the importer could then theoretically “pass-on” to the consumer?

Well, if Congress enacts a law that requires domestic importers to buy Treasuries but doesn’t require these importers to absorb the costs of buying Treasuries, these costs could be “passed-on” BUT even if that were the case, any inflationary cost increases to domestic importers and their store sales chains they deal with and to the customer would be minimal compared to our present situation now OR the government could reimburse our domestic importers with cash so there is no potential pass-thru loss to the consumer or better yet reimburse them with Stablecoin which then could be used by our domestic importers to pay their foreign importer-shippers and/or manufacturers which would be redistributed throughout the world further stabilizing our bond market which would help assist keeping our Dollar as The World’s Reserve Currency!!!

And in conclusion, just to be “on the safe side”, in case Stablecoin use is not enough to keep up with our expanding National Debt as Congress hopefully will enact a more balanced budget, additionally requiring domestic importers to purchase bonds, in the meantime, would solve the problem of making sure the Treasury, pending legislation by Congress to address our budgetary concerns, that we (the Treasury) always has enough funds “on hand” “at all times” to (1) fully finance our budget, (2) any of its cost overruns and (3) the debt servicing costs on outstanding Debt!! And until the necessary legislation by Congress reflecting the work of organizations such as The Committee for a Responsible Federal Budget are adopted and made LAW!!!