Potentially the largest trade in all of history is in the making

Quote from tradingjournals:

Are you sure about some of the conclusions you draw?

1. Lower yield leads to a rise in price of assets, not a decline, because the present value of future cash flows would rise (not decline).
2. So the holders of current bonds would make a killing. The question would rathen be: would they offload on the new buyers (whomever those buyers might be).
3. The twist is anti-deflation, without printing of money, which is good because it would not lead to a rise of price of oil/etc, but a rise in price of assets. They should have done it a long time ago, instead of the QE disasters.
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"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.
 
Quote from FireWalker:

"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.
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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.
 
Quote from bwolinsky:

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.
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I believe that zero interest rates (with no printing) is bullish for a currency. Example: The Yen. Check it out.
 
Quote from tradingjournals:

I believe that zero interest rates (with no printing) is bullish for a currency. Example: The Yen. Check it out.
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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
 
Quote from FireWalker:

Interesting. The Swiss Franc recently raised margins substantially, but I haven't thought about that one.

IMO, gold/silver is the way to go. Tangible.

I wonder how much sterling silver is at Buckingham Palace.
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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.
 
Quote from FireWalker:

Interesting. The Swiss Franc recently raised margins substantially, but I haven't thought about that one.

IMO, gold/silver is the way to go. Tangible.

I wonder how much sterling silver is at Buckingham Palace.
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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
 
Quote from FireWalker:

If Bernanke dumps the long side of all Treasuries and exposes the check-kiting operations of the Federal Reserve, thereby sending the value of Treasuries to $0, the short side of his Treasuries will be ridiculously profitable.

Bernanke would be lauded as a hero. Why?

- National Debt $0
- Personal Income taxes $0
- Mortgage principals near $0 (existing mortgage holders would likely owe only the spread)

The losers in this would be some hedge funds and central banks with large Treasury holdings. Nothing much they can do but go belly up though since Hillary Clinton took out the nuclear threat a couple years ago.

Let's see if Bernanke has the guts and wisdom to save the economy.
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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) :cool:
 
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.
 
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