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Strategies & Market Trends : The coming US dollar crisis
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ggersh
To: ggersh who wrote (65389)3/8/2021 9:31:48 AM
From: Real Man1 Recommendation  Read Replies (2) of 71441
 
Pretty crazy for bonds to trade not far from ATH as US defaults on sovereign debt via inflating the currency 10 fold. Derivatives quant logic for you. A govt that can print can’t default, so default risk for bonds denominated in domestic currency is zero. LTCM and Russian sovereign ruble denominated bonds of 1998 have shown this is not the case, but no matter, no matter, we keep using the faulty model because we don’t have a better one and because all systemic model faults are ironed and smoothed out by the Fed. Now that they are the root of the problem they can’t do that, or can they? I think the derivative markets have been extended to the brink,
the Fed had to come out with a major infusion of money in September 2019 and in March 2020 ongoing.
If they can’t keep the pace, ka-boom!
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