5 year bond auction fails. Its already happening. http://seekingalpha.com/article/152523-u-s-5-year-bond-auction-effectively-fails
Imagine if there were but one bank in the state called Da Playa's Bank N' Bling Depo (combination financial institution and jewelry store). You walk up to the window that features ads for 2 week payday loans that also include a free pipe (they seem very small and cheap though). You're dropping 10mm so you meet the branch manager whose name is "Dime Bag". You evalute the banks and conclude that your 10 mil wouldn't last 10 minutes. Do you open an account? It's the only bank around, and it has a monopoly.
Essentially, that's what happened to Argentina. After many years of politically-motivated deficit spending, ridiculous military expenditures, and a costly and insane war (sound familiar?) with Great Britain in the Faulkllands that put the final icing on the debt cake, no one would step forward to buy their bonds. Even the Argentinian people would not buy them, and they had no choice but to print money. I saw a PBS program last night that claimed that they printed so much money that for a brief period they ran out of paper to print it on! Inflation was running at 100%/month.
http://www37.wolframalpha.com/input/?i=USA+vs+Argentina+GDP http://www37.wolframalpha.com/input/?i=USA+vs+Argentina+debt
Argentina's Economic Collapse http://www.youtube.com/watch?v=rH6_i8zuffs&feature=related BTW: Argentina's minister of finance during the 80's leading up to the crash was called: "Grinspun".
The US has sizable free room left to increase taxes on their citizens, compared to places like Canada, UK or EUR Zone. All this non-sense about the US defaulting on national debt is just that, at least for the next couple of years.
Or even double digit yields perhaps?: http://money.cnn.com/2009/06/19/news/economy/higher_inflation.fortune/index.htm