That principle might be subtle, but is critical. All transactions are promises to deliver value. Consideration conveyed. The dollar is a figment of our imagination. It has value only through its historical use at particular prices. It is inherently worthless, but history and contracts maintain the value. My recommendation to the US Treasury is to dissolve the Fed, kill bonds, add up all the existing contracts to determine how many dollar digits are in the world, keep those digits constant, and peg them to some form of tangible value. That could be gold, silver, land, or perhaps real exports. Since the dollar is the world's reserve currency, the economy would grow quickly and dramatically.
Looks like a few are unwinding derivative positions while the Fed does the opposite of its own best interest. Bonds could go to 160 in the near term.
No, they won't. Not ever, on a 30 yr this would produce a negative yield, which is impossible for any significant period of time, and if the bonds are going to zero I don't see if you confused interest rates with bond prices? Did you really mean that rates go to zero, because you said the price of the bonds would go to zero, not the rate? You seem to be confused about what you have said.
Since there was no "consideration" conveyed at the time of the bonds' acceptance by the Federal Reserve, they are null and void. That means their principal value is $0. It also means the Treasury owes $0 interest. Perhaps you should read my other thread on why your arithmetic calculates an infinite yield. Short answer is zero is not a number. See here for more info: http://www.elitetrader.com/vb/showthread.php?s=&threadid=227379
Check out that 30 year bond. Right on schedule. Hope you got long as yesterday's high was taken out. Exit ~160. Tight stop. Remember the fundamentals. That piece of paper is worthless. Swipe of a pen can take that bond to $0. You might be watching the court system, cause all it takes a lawyer and some media coverage. No stop til $0. Also interesting this morning is gold. Gold is taking a nose-dive. Barbaric relic. Recommend buying around 1600. That's how obvious this nonsense is. See my gold thread for warning about the gold: http://www.elitetrader.com/vb/showthread.php?s=&threadid=207589 To quote a former great: "If you don't hold it, you don't own it."
You know there's no serious investor that really believes that? A revenue stream like that that can be supported by printing money or issuing new debt can always be perpetuated, so I don't see why identifying a Treasury Bond as an illegitimate form of consideration makes any difference to investors. That's just the way it is, and, BTW, Zeitgeist II:Addendum has a 5 minute segment about a man who really did convince a jury that if a bank only issues money as its consideration, then this is illegitimate, which is the same argument you're making about these bonds. I don't think that argument will win out every time, and certainly not when it comes to Treasuries. I mean, what's your triggering event when everyone sends T-bonds to zero? If anything it will be a huge rally in nearly every commodity and possibly global nuclear war. There's not any other explanation as to why the bonds would go down so much.
Never happen they don't care about the dollar only personal wealth. Operation Twist probably has the PPT working overtime to mitigate the damage. I was talking to a another store owner and they were concerned due to the amount of pawn loans coming through the door. The default rate is at ovwer 80%. People are getting down to food and water. Utopia the greatest fallacy, Akuma
For anyone listening to FireWalker: http://img193.imageshack.us/img193/1532/foggerlulz3.jpg http://img717.imageshack.us/img717/249/foggerlulz1.jpg http://img687.imageshack.us/img687/4809/foggerlulz2.jpg Search results NSFW: http://bit.ly/qgWrMg