The coming US dollar crisis Message Board

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Strategies & Market Trends : The coming US dollar crisis

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To: Real Man who wrote (36592)	3/26/2011 7:29:54 PM
From: carranza2	3 Recommendations Read Replies (3) of 71406

A "what if" thought that may be too far out to even think about seriously. What if the Fed, as the largest holder of Treasuries, were to simply state that it no longer considers the US government bound by a huge chunk of them. In other words, it gives the Treasury a pass on substantial amount of them. A huge amount of debt all of a sudden gone. Interest payments gone. Pressure taken off the budget deficit. Pressure for tax hikes goes down. Interest rates I think go down because the full faith and credit of the Treasury rises as the obligation to pay is diminished. Other holders cannot complain, they get paid. USD probably goes up in value. Sounds too good to be true, so there is a huge flaw that I cannot see.

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