Another aspect of uncharted waters is that outstanding U.S. federal debt has doubled in the last four years, resulting in a nearly $100,000 per household liability (and rising at the rate of $12,000 per year) associated with that debt. Who will buy this mounting debt, and at what rate, are questions everyone asks but for which there are no clear answers. Over the past 18 months, the Federal Reserve has been the primary purchaser of newly issued federal debt, with the private sector a net seller. Will the Fed be able and willing to purchase newly issued federal debt? This is an important question, as the Fed is artificially keeping interest rates near zero across the yield curve. But no one (including the Fed) knows what the Fed will do, because we have never before witnessed such monetary expansion by the Fed.

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