[quote=stansd]The only thing you are missing is the naivete of the investing public, the false assumption that the American empire can’t go under, and possibly the blind faith that the foreigners who supply our credit won’t pull our line in the face of their own economic insecurity and our profligacy.
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As I said, misplaced confidence. I’m glad to hear I’m not the only one that thinks this. So you chalk it up to naivete. Can anyone refute, or are we in 100% agreement that bonds have to tank sooner or later? The only gotcha I can think of is Bernanke’s 2002 speech in which he said the Fed could print new money and buy treasuries with it in order to try to manipulate long term interest rates. But again, even if he manages to keep the yields low and prices don’t tank nominally, the dollar would be completely worthless before 10 years are up.