They probably won't let it. The fed will probably print up money to buy bonds to keep the interest rate down. But in the end, they will have the same problem. Eventually that will cause unstoppable inflation, and people will realize that gold pays better return on interest than bonds. The gov will still have cheap financing, but the it will be financed with dollars that will quickly become worthless.
Once people start seeing how gold constantly outperforms bonds, the US dollar will likely lose reserve currency status.
The FED spent 3.2 trillion last year on mostly 10's and 30 year's, and currently buys hundreds of billions of dollars in treasuries each month.
There is not a point where they are not the vast majority of the bid for any government bond and still bond prices are falling because bonds are being issued faster than demand which increases supply and raises yields.
The FED is losing control. Take a look at a 30 year chart of the 10 year treasury on a monthly basis. It already hit the high end of a trading range and they are trying to fight gravity.
They probably won't let it. The fed will probably print up money to buy bonds to keep the interest rate down. But in the end, they will have the same problem. Eventually that will cause unstoppable inflation, and people will realize that gold pays better return on interest than bonds. The gov will still have cheap financing, but the it will be financed with dollars that will quickly become worthless.
Once people start seeing how gold constantly outperforms bonds, the US dollar will likely lose reserve currency status.
The FED spent 3.2 trillion last year on mostly 10's and 30 year's, and currently buys hundreds of billions of dollars in treasuries each month.
There is not a point where they are not the vast majority of the bid for any government bond and still bond prices are falling because bonds are being issued faster than demand which increases supply and raises yields.
The FED is losing control. Take a look at a 30 year chart of the 10 year treasury on a monthly basis. It already hit the high end of a trading range and they are trying to fight gravity.