$9 Trillion Debt: Who Gets Robbed?
The answer is anyone holding cash. The Federal Reserve's plan to monetize the 2026 maturity wall is a deliberate scheme to dissolve your purchasing power.
They’re going to rob you blind, and they’re going to make you thank them for it.
Not with guns. With spreadsheets and press releases and the polite language of central banking. With phrases like market functioning support and balance sheet management and financial stability operations.
The theft is already in motion.
Nine trillion dollars of government debt comes due in 2026. Now. That’s roughly a third of all outstanding US government debt maturing in a single year.
And the people who’ve been buying that debt? The Federal Reserve, foreign central banks, the price-insensitive buyers who absorbed trillions without blinking?
They’ve stopped buying.
Some are selling.
So here’s the question nobody in power wants to answer: Who will buy the debt?
The Federal Reserve has pivoted from purchasing billions in Treasuries every month to selling billions every month. They’re not just absent. They’re making the problem worse.
China has slashed its Treasury holdings by 11% since 2022, buying gold instead. Saudi Arabia’s holdings have dropped. The reliable foreign demand is evaporating.
What’s left are American households and hedge funds. Regular people chasing yield because rates finally broke 5% for the first time in two decades. Speculators running leveraged arbitrage schemes in the repo market, the same trades that nearly destroyed the financial system in March 2020.
These are desperate, yield-seeking, price-sensitive actors who will vanish the moment Treasury auctions start failing.
And when those auctions fail? When the government tries to sell debt nobody wants to buy?
Yields will spike. Fast.
Here’s what happens then.
American banks are sitting on hundreds of billions of dollars in unrealized losses on the bonds they purchased during the zero-rate era. As long as they don’t sell, they can pretend those losses don’t exist.
But when depositors panic and withdraw cash? Remember Silicon Valley Bank? Banks are forced to sell bonds at market prices. Those losses become real.
Banks become insolvent.
Commercial real estate follows. Loans written at 3% can’t be refinanced at 7%. Buildings bought assuming 4% cap rates can’t service debt at 8%. Defaults cascade through regional banks already underwater.
The government faces a binary choice: allow a deflationary collapse worse than 2008, or print money to buy the debt themselves.
They will choose to print.
They have to. The alternative is politically unthinkable, economically catastrophic, socially explosive.
So the Federal Reserve will announce some new program. Market functioning support, perhaps. Or liquidity facility operations. And they will buy unlimited quantities of Treasury debt to keep yields from spiking.
This is called Yield Curve Control. Japan has been running it for years.
The cost is a currency in freefall.
The United States did this before, from 1942 to 1951, capping Treasury yields at 2.5% while inflation roared into double digits. Savers were destroyed. Bondholders were paid back in dollars that had lost half their value.
It was a transfer of wealth from citizens to the government, executed through the printing press.
It’s happening again. Right now.
The people who will suffer most are the ones who’ve done everything right. The retirees holding government bonds for safety. The workers whose wages can’t keep pace. The families priced out of housing as asset prices inflate while purchasing power disintegrates.
Meanwhile, the people who own things? Stocks, real estate, gold, mining companies? They’ll watch their nominal wealth explode.
Not because they’re smarter. Because they’re positioned on the right side of the debasement.
This is the K-shaped recovery taken to its logical, vicious conclusion.
Asset owners soar. Everyone else drowns.
The inevitable response is financial repression: capping yields, printing money, and letting inflation run hot to burn off the real value of the debt.
It’s not speculation. It’s the only mathematical solution to an unsolvable problem.
The debt cannot be repaid. It can only be inflated away.
So when you hear Fed officials talking about fighting inflation, about maintaining price stability, about their commitment to the dual mandate? Understand what you’re hearing.
Theater.
Misdirection.
The desperate performance of an institution that knows the script but can’t admit the ending.