What would happen if savers lost confidence in governments?

The very sharp rise in public debt ratios should not worry savers since in principle, it is monetised by central banks. This is because the public debt held by the central banks is de facto cancelled as soon as central banks undertake not to reduce the size of their balance sheet at a later date. But it is possible that the sharp rise in public debt ratios may still cause a movement of distrust among savers, if they do not understand the mechanism described above, and if they believe that central banks will want to reduce the size of their balance sheet in the future. We could then see concern about: A possible restrictive fiscal policy with tax increases, which would trigger an increase in precautionary savings and therefore a decline in demand; Possible government insolvency, which would lead to sales of public sector bonds and the need for central banks to buy much more public debt; this would lead to even greater money creation, with the resulting risks of financial instability. Governments and central banks must therefore be able to convince savers-investors that there will be no fiscal solvency problem as a result of the irreversible monetisation of public debt.