"Free money in the hands of greedy sociopaths for too long is going to create something that's not very pleasant," Fixed it.
It's amazing that your can be a moderator at a trading website while still being so completely ignorant of basic finance. Raising rates will DECREASE the present value of outstanding debt (treasury bonds, as you will note, have fixed coupons); Finally, given the dollar is the world's reserve currency with no real competition (the euro has more problems, RMB is benchmarked and tightly controlled - who else?), the US can always finance at the expense of the world.
Well.... duh.... and the sun will one day no longer rise. The question is indeed when. It won't be tomorrow. It won't be next year. It won't be next decade. And it won't be because of QE.
Not the next decade even? You sure,? the monetary base looks pretty parabolic at this point. i don't know how much longer the rest of the world is going to pay for oil in USD's, theyre getting robbed in broad daylight.
Yes. I'm rather sure. They'll keep paying for a very long time. First, they are no getting robbed. OPEC is happy to price oil in dollar and china is happy to invoice in dollar so long as the goods are still being sold in dollars and dollar consumers is still around. Now, I suppose RMB can become a reserve currency if OPEC's consumer demand is large enough to take a substantial amount of chinese imports; or the chinese are happy to take down their capital control (and face the associated social and economic problems). Neither are likely.
Interesting, I remember the documentary "trader" with paul tudor jones before the 87 crash. They were all worried about the inflation back then and thought they were going to be effed in the next couple years like most do now days. Yet we have managed to just grow the problem without "the end" occurring yet. Maybe this thing could go on for a lot longer than everyone thinks.
I think so. Despite all the chicken littles on ET (on both wings of the political spectrum), there's no reason to think the policy levers of raising fed fund rates, reverse repos, and (if it comes to it) increasing the discount rate can't control the inevitable inflation (though not hyper) and asset bubble that will eventually come to pass. The whole point of QE is that asset bubbles after math are much easier to deal with and far less painful than a leverage/credit bubble aftermath.