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Originally Posted by Wbulk
Turkey and Spain are over extended so they have to print more Euros and raise interest rates to pay for deficits. The Fed has to raise rates to keep in the bond market? Those holding existing bonds would lose? I wonder!!
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It's just a theory.
First, it's called the PIGS (Portugal, Italy, Greece, and Spain). Yes, the weaker nations of the Euro Union may need help. They may default or the stronger Euro nations may bail them out. Germany is the stronger one. Since they are part of a larger European Union, they just can't devalue their currency, as we can.
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The Fed has to raise rates to keep in the bond market?
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How long can you suffer from 0.10% money market yields? History does tell us that these rates are very unusually low rates.
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Those holding existing bonds would lose? I wonder!!
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Do you know how much a guy could lose in a bond fund with just a 1% increase in long-term rates. It's a good 10% just cut off the top of your investment.