I noticed that our debt level was increasing before at 3.8 bil per day and now with the new accounting SCAM we are only , LOL ONLY Increasing by 1.7 bil per day... Well they at least worked off 2 bil a day with phony numbers. I guess they figure now they have that much extra to spend ? LOL 85 Bil per month from the FED isnt showing itself on the debt clock either which is quit interesting. Fool most of the people ALL THE TIME.. Fool me NEVER... I will continue to ENJOY Stacking Silver for Cheaper pricing.....
They will need to do something. Interest expense will explode with the higher rates. The federal reserve isd holding 85 billion per month for 5 years of QE2. That is 1.2 trillion a year or 6 trillion since 2008, That will require a 51 billion payment per year to cover. The federal reserve stands to lose a trillion with the increase in interest and the bond holding going south.
Government spending has gone down and tax receipts have gone up. The can handle higher interest rates. Also, it doesn't matter if the fed loses money on its bond holdings. They will most likely hold them to maturity. Even if they did sell for a loss it has no affect.
What can they do ? This is why guys like Peter Schiff keeps telling people to continue to buy Precious metals. Nobody out there to buy back the debt. And like you said interest rates rise and will only add to debt payments. Also If they stop buying then bonds will crash and so to will many JOBS... Means tax loss for them and more printing for un employed people. If interest rates go up then Housing will get CRUSHED again meaning less house ownership and less tax money. The Game is at an end. All Ponzi SCAMS come to an end and this one is no different. Enjoy it while it lasts . I myself think this is the last dive before the explosion. In the next few years I say we see Hyper Inflation . Land / Commodities / Food and Ammo are the things to have and be invested in.