What do you get when you roll over a five-year bond from 2021 to 2026? You get far higher interest rates.
Payments on government debt continue to soar amid high debt levels and relatively high interest rates (Source: econovis.net)
Total municipal, state and federal debt service costs soared to nearly $1.5 trillion in the third quarter of 2025. Debt’s easy to accumulate when rates are low. Trouble is, you are obligated to refinance them even after rates go up.
It’s also a key reason why the Trump administration is demanding lower interest rates – even if it means reigniting inflation.
As long as rates are trending lower, like they did from 1980 to 2020, government debt appears manageable. If, as our own Andrew Packer has suggested, we’re at the start of a 40-year secular cycle of rising interest rates, government debt across the Western world, debt itself will force voters to rethink what they ask their government to do. (See: Grey Swan 2026 Forecast #7)
~ Addison
P.S. Last week, we wrapped our first Grey Swan Live! of the year, with Matt Smith, publisher at Casey Research. Matt and co-author Doug Casey have just released a new book titled The Preparation: How to Become Competent, Confident and Dangerous.
Our conversation with Matt was fantastic – on a different plane than our usual Live! themes and a great way to kick off the new year. It’ll be well worth your time to listen to the replay, which is posted to the Grey Swan Live archive in the members’ section.
We’re also recommending members buy a copy of The Preparation for a young man in their lives. And we’ll have updates on this week’s Grey Swan Live! soon. Stay tuned.
