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They can bury the bond market with an infinite pile of money. Not even really sure why we need a treasury market anyway.
I think Marx answered this question:
The public debt becomes one of the most powerful levers of primitive accumulation. As with the stroke of an enchanter's wand, it endows barren money with the power of breeding and thus turns it into capital, without the necessity of its exposing itself to the troubles and risks inseparable from its employment in industry or even in usury. The state-creditors actually give nothing away, for the sum lent is transformed into public bonds, easily negotiable, which go on functioning in their hands just as so much hard cash would. But further, apart from the class of lazy annuitants thus created, and from the improvised wealth of the financiers, middlemen between the government and the nation—as also apart from the tax farmers, merchants, private manufacturers, to whom a good part of every national loan renders the service of a capital fallen from heaven—the national debt has given rise to jointstock companies, to dealings in negotiable effects of all kinds, and to agiotage, in a word to stock-exchange gambling and the modern bankocracy.
Gee there is that government debt functioning as money thing again too.
[FONT=Verdana]With interest rates being kept artificially low, I would think that sooner or later, market forces would start to keep in and unleash the compressed spring, known as interest rates. I'm just wondering what the catalyst is likely to be. I for one think China dumping their holdings of US Treasuries could do the trick.[/FONT]
I have a gut feeling they will stay low, or go lower, for several more years.
Artificial credit results inevitably in higher interest rates, the trigger itself being secondary. The raising of interest rates has to happen as consumer demand eventually manifests itself in spite of the investment bubbles created.
By the time China dumps the dollar, there will have already been much at play to get rates rising. Rising consumer prices that outpace bond yields for one.
^^This is a classic example of the post 2008 scrounging mentality. TBTF banks; TBTF indebted spendthrifts; TBTF Stock Markets; etc... Prosperity, via parasitic sabotage, is the accepted/respected norm in the financial World.
Generally not as long as QE is in effect but with time they will raise by FED action to prevent inflation. Not much reson for Japanese or Chinaese to dump tresureis as that would kill their investments'especailly Japn who is invest more since their econmy is i dumps for a deqacde.The Chinese depend on exports and outside investors largely.
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Prosperity, via parasitic sabotage, is the accepted/respected norm in the financial World.
