Just wondering... Since the fed has so many bonds on it's balance sheet now... What would happen if, hypothetically, interest rates were to go way up causing bonds to lose much of their value? Could the fed declare bankruptcy, would the us government bail out the fed (and then add more to the 'deficit')? Or something different? Just curious, this is all a bit complicated to me.
It's called a "magic printing press" - when people stop buying into FED's Ponzi scheme the rush will be explosive and you will see FED bonds trading like junks. Germany announced yesterday they want their gold shipped back to Dusseldorf/Munich - they do not trust USA ... sooner or later people will look at a bunch of worthless paper yielding close to zero and say #$%$ ? Why do I own this?"