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There isn't a correlation between government debt and interest rates because no one wants to admit the Emperor is Naked. Correlation is historical and, like beta, can change on a dime, if anyone has one.
Dec 30 09:21 am
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All Comments by Prudent Man CFA »What Is the Monetary Base? [View article]
As Jim Grant, the Fed is clueless as to the money supply. When one looks at the Fed's Balance Sheet it is obvious the printing press is running 24/7. That is why interest rates are low. What happens when this changes or will the Fed beat the dollar down to zero so no one will accept it for payment.
Bernanke (his Great Depression thesis) has stated he wants to devalue the dollar. That may, or may not work. If it does work it will someday end. The worst of this it is not working.