How are these two related?
The central banks buy government bonds, and more recently, they are buying mortgage bonds. The central banks create money from nothing. More “currency”, as it is called (I prefer the term paper tickets), the more danger there is that the currency will lose value (currency crisis).
The bond bubble directly resulted from central bank bond purchases, driving up prices (yields driven lower).
As an aside, I am betting that bond prices will go much higher (yields will go even lower). The Fed Heads are telling us this is going to happen through their silly meetings and rubber chicken lunch time speeches. Volcker came out and said it’s OK to print, and a Fed Head came out today and said the same thing.
Bubbles can go on much longer than anyone anticipates.
The day will come when no one wants dollars (currency crisis) or U.S. Treasuries (bond market crash). But, for now, things are rockin’.
Do you believe that there could be another black swan where the US dollar will raise phenomenally again?
I have some investments in commodities, the returns have been handsome, but now, from the looks of it,
there is a possibility that the dollar will again raise against all other currencies against all odds.
Everyone, please lend me your opinion!
Rosstaylor,
It’s a new topic, I suggest you start a new thread.
Come on, it’s a yes or no question! One word answer?
Rosstaylor,
Then the answer is yes, of course there could be an event that causes the dollar to rise substantially. You bet there could be. (But I still suggest staying on topic, people read your threads based on the headline, if you discuss something else, folks tend to get edgy).