Quote:
Originally Posted by thommy
the FED does not have instruments left to pump up the market. The low interest was the only thing they could do to go against the financial crisis.
but imagine, the interest rate than fell from 5% to zero.
how much is the interest rate when you take 5% from 2 or 2,5% ?
regarding the bonds:
China holds around 1,2 trillion in US bonds. they bought most of them in the financial crisis on a low interest rate and that helped the US a lot.
if the US wants more foreign capital (and they will need it because the debt is rising like never before) they need to give more interest. US bonds already lost their triple A rating they had over many many decades. the air becomes thinner every fucking day.
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..... as I watch the market (1.10 hours in) -275 in the last hour alone. That said, Japan holds an additional trillion. Although both are very concerning it is obvious the only direction left to go is the way of Japan ie., Keynesian economics. At the very least it will cause a similar zombie economy. The problem is it's very short-lived because of the ONLY reason Japan's economy works is we are still their trading partner. In short, the US has no one equivalent. It's all going to come down.