The fact that someone stood up and said “we do not trust the honor of the US to fulfill a debt” is important. We’ll see how much of an impact that actually has, but my kneejerk reaction is that it was meaningful.
I don’t think that needs to happen, if you get into a hyperinflation situation, right? And Trump and co have been doing a lot to destroy the underlying productivity of the us economy over the last year.
The fact that someone stood up and said “we do not trust the honor of the US to fulfill a debt” is important. We’ll see how much of an impact that actually has, but my kneejerk reaction is that it was meaningful.
:-/
The global market will pounce on $100M in underpriced Treasuries.
A better question is what the Danes plan to replace the reserves with. Now would be a cool time to roll out EuroBonds.
That said…
This is, has, and will continue to be a dumb reason to sell US Treasuries. The Bond Vigilantes always lose their shirts in the end.
Do you assume that a collapse of the US economy is impossible?
It’s highly unlikely under current conditions
What conditions would be needed to make it likely?
Quite a few. But, just for starters, you’d need the Federal Reserve to turn off the unlimited money spigot.
I don’t think that needs to happen, if you get into a hyperinflation situation, right? And Trump and co have been doing a lot to destroy the underlying productivity of the us economy over the last year.