As you can see, there was no particular correlation between the two right up until the early 1980s. In fact, up until the huge surge in debt issued to finance World War II, Treasury debt hardly registers on this chart at all. The steady and inexorable rise in Treasury debt began with the 1970s. The most important event which made this possible was the removal of the discipline of Gold backing for the Dollar, which took place on August 15, 1971. You can clearly see that 1970 marks the point where the blade ends and the stick begins.
All modern money is based on debt.
But even though gross Treasury debt is still increasing too, it annual rate of increase is slowing down - fast. In fact, the acceleration of Treasury debt peaked eight years ago - in 1991. That huge fall in interest rates led to a sea change in the attitudes of Americans. Slowly but surely, they began to abandon the banks and traditional investments like real estate. For thirteen years, the increase on Treasury Debt supplying more money to the system dragged the Dow upward.