How will the bond payer's lifestyle be affected if they are unable to pay the bond owners? Will there be a new bond owner willing to step up and finance the bond payer's needs? Probably, but at a much greater cost. Is there a magic wand that CB's can waive and make the problems disappear, or will the piper eventually be paid? It seems that bonds are assets for some, and liabilities for others. Who wins, who loses? Interesting questions that will be answered in our lifetimes.
What are you referring to? The bond owners are the lenders and the bond payers are the borrowers. When you borrow at fixed rate, there is never a guarantee that interest rates won't drop. If they drop significantly, you borrow at lower rates and call in the old bond. It's called refinancing. The bond owner whose bond was called will be sitting on cash, and they will have to reinvest at lower nominal return. They have been partially compensated for the risk they took in lending at fixed rate by receiving a higher return to start with. When they lend again at lower rates their real ROI will be similar to what it was when rates were higher. On the other hand, if nominal rates rise, the fixed rate borrower is in good shape but the lenders ROI will decrease. That's why you have to pay higher interest to borrow at fixed rate, it gives the lender some compensation for the risk they take that nominal rates may rise. Don't forget it is not the nominal rate that matters but the real rate. Real rates are similar now to what they were when nominal rates were higher. If perhaps you were suggesting that borrowers were going to get so poor that they would default. If a bond is properly rated, the lender is compensated for risk of default by receiving a higher nominal rate when the risk is higher, which increases, on average, their real return. If the bond is secured, then the lender will suffer only partial loss if there is a default. In any case the lender would virtually never suffer a total loss unless there is fraud. The answer to your question is, the same as always.
They were trying to disguise political commentary as a question, typical among those holding the tin hat views around here. It's a lost cause with these types, they have the naive idea that a nation's finance should be run like a household's and have no grasp of the difference between macro and micro economics.
Fractional-reserve handles the macro and micro management of the economy. The problem is: the USD is backed by bonds which creates ~$350 billion in interest payments to those wealthy enough to hold bonds, and provides nothing but trickle-down service industry employees.
Bonds aka debt is a two way street. It takes a borrower and a lender. If one thinks that borrowing money is rnslavement, then don't borrow money. I have seen borrowing money to be a very useful tool in creating wealth in the business world.
? No they're not. There used to be a real return. Now there is very little. You have to go out five yrs for there even to be any real return.