"Consideration" is a legal principle that says that value must be conveyed for a contract to be valid. Since the Fed kites checks for a living, there was no "consideration" conveyed and the T-bond is null and void. That means there is no contract and nothing owed by the US Treasury. However, once sold into the market, the scam victims cannot argue the same point as value was conveyed in Fed's open market operations.
There isn't anything illogical about stating that for our treasuries to be worth zero then our currency will not have any value, even from the winners betting on the fall.
I believe that zero interest rates (with no printing) is bullish for a currency. Example: The Yen. Check it out.
He didn't say interest rates, he was referring to treasury prices of the bonds themselves, not interest rates. If Treasuries=0, the US Dollar=0.0001
Not as much as their was prior to King George. A lot of guests absconded with Buckingham sterling flatware during his garden parties. Forks and spoons began disappearing like mad. To protect what's left, ever since George, they've gone to cheaper flatware for use on the lawn.
Don't forget the rest of the crown. Canada, Australia, New Zeland, etc. All of their assets count too. Reguardless the crown is well backed USD/ GBP has a real funny chart. EUR/USD is a no brainer. If a dramatic move is made buy the FED then the whole global game will change. China will still be holding all the cards though. Welcome to Neo Fuedalism, Akuma
No offense, but T=0 brings about a few more losers than just some hedge funds and CB's... http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt As stated above, end result: US = 0 (may already be there but not on paper)
The dollar would be largely unaffected in the short-run and benefit in the long run. The dollar's value is arbitrary and currently set to the aggregate existing contracts denominated in dollars. Would menu prices change? Nope.