Thanks for the interesting history. Could you please elaborate what happened to the European countries in 1920s when they couldn’t pay back their loans? Bankruptcy? Currency devaluation? Huge number of foreclosures or assets were sold to account for the losses.
Why do you think that the Fed can lower rates if foreigners stopped buying treasuries? Who will buy all the treasuries then if rates went down? The reason US could afford to lower rates after the tech recession was because foreigners were buying treasuries and pumping money that was being passed to the US consumer. I don’t think Fed will be able to reduce rates as it was the foreign investor who pumped capital into US and not the Fed.
