............................................................. Yes and No.... What would happen if China nor Japan could no longer buy US debt ? This is the question....
well,,, maybe it "game over" already........i do not believe anyone has a workable plan to save the dollar from seroius devaluation
Rosenberg had several articles on this. Babyboomers (disillusioned with speculative investments blowing up in their faces shift from a capital gains focus to an income focus) and US banks potentially stand ready to soak up US bonds. Private individuals used to own a much larger bond share in their private asset allocation. All this changed in the last three decades. According to Rosy we may see a reversion to the 50s/60s here. All this is not completely infeasible. Private investors and institutions in Japan are happily buying JGBs yielding 1-2% since a decade or two.
.................................................... Lack of options ....is a reason.... Prices horizontal ? The question being "how long ".... And actually the low interest rate trap....is key in valuations....and thus banks' books.... ie the norm for LT debt 2% for 10 years.... What happens to the value of a LT bond with a 3% coupon....when rates move to 6%....10%.... What happens to valuations in general across the board ? This is the interest rate trap.....