What will happen when the Fed stops buying T-Bonds? Prices will drop, and yields (and all interest rates) will skyrocket?
I'm guessing when the Fed stops artificially propping up bond prices they will fall and rates will go up but I also suspect the Fed is fully aware of this and will allow rates to go up when they want rates to go up. They have already stated they will probably stop propping up the housing market by withdrawing tax credits for first time buyers so it would make sense that they will allow the bond market to fly somewhat more freely as well. All will be well soon, there will be more jobs paying $8 than there will be people willing to occupy them. If you woke up this morning in reasonably good health or better then life is good. Sit back and enjoy the ride.
Wrong anwer. You know that, there will be massive hyper inflation. Leading to a complete collapse of the U.S dollar, followed by the governments and all society. riots, and anarchy will rule the day. Fires will rage day and night as people burn down their cities. Then an all out civil war, where the European bankers will send the United Nations military to instill an NWO with the Amero currency. Americans will be disarmed, led to FEMA camps, and re indoctrinated, or used as test subject for genetic engineering.