When I have excess money I wouldn’t think of taking a loan which is much smaller than my savings. Why does a sovereign state issue sovereign bonds to borrow tens of billions dollars when it has in reserve over half a trillion dolars?
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The state has both currency reserves and sovereign debt for the same reason most of us have an “emergency fund” and credit card debt simultaneously.
The liquidity is nice to have.
At least that is my take on it!
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