What happens to Australian RE investors if US bond market collapses?

I've been hearing stories lately that the US bond market is on the brink of collapse, like it could collapse next month or November. Okay, its rumor from a good source but even if it doesn't happen, Im curious if that affects us Australian property investors.

What Ive been hearing is that the US federal reserve is purposely engineering the collapse so the bonds are worthless to ensure that hyperinflation doesnt occur. You see, the banks own the world now, there really is no argument about this I think, and they will not allow hyperinflation to occur as they know they lose big time, as in, we can pay off debt quicker and they end up holding worthless fiat currencies. So this way the cost of your repayments each month skyrocket, you cant make your repayments, so the bank takes your house and keeps your money.

Now, if this happens it is all in the USA. Does that have any effect for us here in Australia and if so, how?

I'm not too clued in on the markets but I really feel the US is on the financial brink of the abyss and Im not too sure what that means for us.

I hope I made sense, I can almost make sense of it myself.
 
What Ive been hearing is that the US federal reserve is purposely engineering the collapse so the bonds are worthless to ensure that hyperinflation doesnt occur. You see, the banks own the world now, there really is no argument about this I think, and they will not allow hyperinflation to occur as they know they lose big time, as in, we can pay off debt quicker and they end up holding worthless fiat currencies. So this way the cost of your repayments each month skyrocket, you cant make your repayments, so the bank takes your house and keeps your money.

I suggest reading some basic economics textbooks first, 'cause you have no idea.

If bond prices fall, yields rise. That means for bond prices to 'collapse', interest rates have to skyrocket. Exactly how does that help anyone? People wouldn't be able to pay their mortages, they'll default, and the banks get stuck with a bunch of houses that become worthless because no one can afford to buy because interest rates are so high. That's what's happening now in the US without high rates. Exactly how would the Fed (which is different from the banks) benefit by 'engineering' ultra-high interest rates? And if that's the objective, why is the Fed keeping the overnight rate at practically zero? If they're afraid of hyperinflation, quantitative easing doesn't make any sense.

Banks don't WANT your house! They want you do keep paying the interest and they pick up the spread. Do farmers cut down their fruit trees for wood? Do dairy farmers kill all their cows for meat?

Which psycho have you been listening to? Heck, why not suggest going back to the gold standard?

where were you a year ago? Did you 'feel' that the market is on the brink of the abyss then? Becuase THAT was when it was a real threat. If you didn't feel anything then, why should your 'feeling' be any more reliable now?
 
I suggest reading some basic economics textbooks first, 'cause you have no idea.

If bond prices fall, yields rise. That means for bond prices to 'collapse', interest rates have to skyrocket. Exactly how does that help anyone? People wouldn't be able to pay their mortages, they'll default, and the banks get stuck with a bunch of houses that become worthless because no one can afford to buy because interest rates are so high. That's what's happening now in the US without high rates. Exactly how would the Fed (which is different from the banks) benefit by 'engineering' ultra-high interest rates? And if that's the objective, why is the Fed keeping the overnight rate at practically zero? If they're afraid of hyperinflation, quantitative easing doesn't make any sense.

Banks don't WANT your house! They want you do keep paying the interest and they pick up the spread. Do farmers cut down their fruit trees for wood? Do dairy farmers kill all their cows for meat?

Which psycho have you been listening to? Heck, why not suggest going back to the gold standard?

where were you a year ago? Did you 'feel' that the market is on the brink of the abyss then? Becuase THAT was when it was a real threat. If you didn't feel anything then, why should your 'feeling' be any more reliable now?

Your right, i dont have any idea. I think I stated that in my original post. You make some very good points. I don't really understand bonds or debt securitization, but I was talking to someone who is a hedge fund manager in Goldman Sachs. (also note I may have not written what he stated accurately because as you can see, I dont really understand the financial markets)

As to your question about the brink, I don't think the USA is out of the woods, the US dollar is falling rapidly, it is being used as a carry trade currency. To stop traders using its currency as a carry trade, it needs to raise interest rates, if it does that, the economy will only compact even further, yet if they hold rates at such levels, the US dollar continues to slide. All the while they are 350% of GDP in debt, they cant export their way out of this. I was told that the second wave of mortgage defaults were on its way as what he called "The Alta-a" mortgages reset (he said Alta-A is going to be bigger than sub prime). He said that this is not going to be a "W" recession, but an "L" recession, which I gathered he meant was a rapid decline.
 
I suggest reading some basic economics textbooks first, 'cause you have no idea.

If bond prices fall, yields rise. That means for bond prices to 'collapse', interest rates have to skyrocket. Exactly how does that help anyone? People wouldn't be able to pay their mortages, they'll default, and the banks get stuck with a bunch of houses that become worthless because no one can afford to buy because interest rates are so high. That's what's happening now in the US without high rates. Exactly how would the Fed (which is different from the banks) benefit by 'engineering' ultra-high interest rates? And if that's the objective, why is the Fed keeping the overnight rate at practically zero? If they're afraid of hyperinflation, quantitative easing doesn't make any sense.

Banks don't WANT your house! They want you do keep paying the interest and they pick up the spread. Do farmers cut down their fruit trees for wood? Do dairy farmers kill all their cows for meat?

Which psycho have you been listening to? Heck, why not suggest going back to the gold standard?

where were you a year ago? Did you 'feel' that the market is on the brink of the abyss then? Becuase THAT was when it was a real threat. If you didn't feel anything then, why should your 'feeling' be any more reliable now?


Pot.
Kettle.
Black.
 
I call Aussie Dollar parity before Q3, 2010.

the US dollar will fall away sharply now - the yen, euro and GBP will rise against it.

i expect the USD to remain low for a good number of years then.

an L shaped recovery means a drop (like the vertical part of the L) and then sideways movement (ala the foot of the L) or little to no growth recovering.

a W style recovery is a fall, panic buy back, overbought, profit take, sell off then a return to growth.
 
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