More Importantly From The Romney Vid: Upcoming Failed Treasury Auction

The media have been going nuts over Romney's "47%" statement, which admittedly was a politically unwise proclamation for someone running for national office. (Although it is true that the overwhelming majority of people receiving some form of government assistance wouldn't vote for Romney, anyway.) But the recent political theatre aside, the more salient point that Romney made in the infamous Mother Jones video is something the media didn't cover: the government has run out of buyers of its debt. From the Mother Jones video transcript:

Romney: [The] former head of Goldman Sachs, John Whitehead, was also the former head of the New York Federal Reserve. And I met with him, and he said as soon as the Fed stops buying all the debt that we're issuing—which they've been doing, the Fed's buying like three-quarters of the debt that America issues. He said, once that's over, he said we're going to have a failed Treasury auction, interest rates are going to have to go up. We're living in this borrowed fantasy world, where the government keeps on borrowing money. You know, we borrow this extra trillion a year, we wonder who's loaning us the trillion? The Chinese aren't loaning us anymore. The Russians aren't loaning it to us anymore. So who's giving us the trillion? And the answer is we're just making it up. The Federal Reserve is just taking it and saying, "Here, we're giving it." It's just made up money, and this does not augur well for our economic future. You know, some of these things are complex enough it's not easy for people to understand, but your point of saying, bankruptcy usually concentrates the mind.

Bingo. How is the national debt, much less the $60-100 trillion in unfunded liabilities (depending on who you believe), going to be monetized if no one is left to buy the debt? This is America's primary fiscal--and economic--conundrum down the road: hyperinflation. The government will have no choice but to inflate away the debt.