The Fed is getting destroyed...massive bond losses

Isn't the relative purchasing power of a currency relative to the currencies of trading partners the only thing that really matters in a global economy of fiat currencies? On that basis it would seem that the U.S. is doing OK. Not great, but OK. We seem to be able to deflate our currency competitively with that of our trading partners. So far anyway. But of course if we fail to produce anything of value to the rest of world we will be in "deep doo doo." I bought some beef steaks the other day. Had to take out a short term loan at the bank to do it, low interest though. I don't think we should buy a single one of those new F-35s from Lockheed, but they should sell like hotcakes in the middle east and elsewhere. Let's do it. Of course we'll have to cut of all "foreign aid" to keep from buying any ourselves. :D
 
Quote from Maverick74:

Yeah, you're wrong. During heavy deflation debt usually gets "liquidated" as in defaults. You DON'T get your money back. Hence why bankruptcies surged during the 2008 credit crisis. Hence why credit default swaps went parabolic due to defaults. Hence why firms like Lehman and Bear went under. Deflation is NOT good for bondholders. I have no clue what gave you that idea. If I lent you $100 at 5% interest and you lose your job (deflation) I'm not ever seeing that $100 again. Who gives a flying f*ck if the dollar got stronger. I'm not seeing any of those dollars.
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OK, that's something to think about. Thanks.
 
Quote from piezoe:

Isn't the relative purchasing power of a currency relative to the currencies of trading partners the only thing that really matters in a global economy of fiat currencies? On that basis it would seem that the U.S. is doing OK. Not great, but OK. We seem to be able to deflate our currency competitively with that of our trading partners. So far anyway. But of course if we fail to produce anything of value to the rest of world we will be in "deep doo doo." I bought some beef steaks the other day. Had to take out a short term loan at the bank to do it, low interest though. I don't think we should buy a single one of those new F-35s from Lockheed, but they should sell like hotcakes in the middle east and elsewhere. Let's do it. Of course we'll have to cut of all "foreign aid" to keep from buying any ourselves. :D
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No. When you devalue your currency, you devalue your standard of living. You cannot grow prosperity by making your currency worthless. No civilization since ancient Babylon has been able to devalue themselves to prosperity. It's outright theft. It robs the middle class of their assets and their wealth and transfers it to the kings and royalty, or in this country, the rich. Throughout history leaders were hung for robbing their citizens of their currency. Now we applaud because the Dow Jones makes a record high. Which coincidentally correlates strongly to property values in the Hamptons.
 
I think we are getting closer to a foreign bond holder revolt. The world is too bigand diverse to keep needing fund the US at trillion dollars a year. The world may start moving east. In the 9os the US was the place to be
 
Quote from trilogic:

Well I read all sides but what is the position to take long term in event of fed spiral out of control and a currency war?
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Buy land, guns, ammo, medicine and some good guard dogs. I'm serious too.
 
Quote from trilogic:

No gold with the ammo etc?
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Here's my concern with Gold. The central banks around the world are the largest holders of Gold. If they get squeezed they will have to dump their gold on the market to raise cash. I could see a trade where Gold goes parabolic briefly and then crashes as the Fed starts unloading into the rally.
 
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