> LOL! Japan preparing a massive liquidation of U.S. Treasuries which could send interest rates SOARING and destabilize the entire bond market

wrote:

The "urge" for a weaker dollar would mean that the US stock market (denominated in dollars) would soar.

If we all stop with the politics for just a second... the US wants a weaker dollar.  This will mean US labor is more valuable and tourist can't wait to invest in the US.

It's pretty rational given that since the 80's the US has been about BIG MONEY and BUY BUY BUY.

Now, we're swapping roles. The US will fabricate shyt for y'all.

I understand stocks and bonds can and do move in opposite directions.  OP said "interest rates SOARING and destabilize the entire bond market".  That's more of a disaster that would tank stocks too.  Bonds and stocks both can tank when there is a disaster, see "The Depression" for a concrete example.  During the Great Recession stocks did poorly and so did lower grade bonds.  High grade bonds did OK, though, so I give you that.

Perhaps the stocks were seeing an opportunity there and they see the danger but don't think it is as great as the OP's hyperbole.  That could be the case.

SamplesBoi wrote:

I understand stocks and bonds can and do move in opposite directions.  OP said "interest rates SOARING and destabilize the entire bond market".  That's more of a disaster that would tank stocks too.  Bonds and stocks both can tank when there is a disaster, see "The Depression" for a concrete example.  During the Great Recession stocks did poorly and so did lower grade bonds.  High grade bonds did OK, though, so I give you that.

Perhaps the stocks were seeing an opportunity there and they see the danger but don't think it is as great as the OP's hyperbole.  That could be the case.

The BOJ and Federal Reserve are doing everything in their power (which is a lot) to prevent the US bond collapsing and/or the JPY further weakinging and/or the USD doing something.

Japan wants a strong dollar, they have an aging population more suited to consumption rather than production vs the US that wants a weaker dollar for reasons I mentioned yesterday.

That said, there is a small BUT NON-ZERO chance so players in the bond market decide to test the dollar and/or yen valuation.  There's an even smaller chance that those players can push it so far that the Federal reserve and/or BOJ "blink" and refuse to keep the currencies within the prescribed bounds.  If that happens shyt goes whomperjaw. 

I really don't think it is going to happen like that though... I think we'll just see a period of years (5? 20? 50?) with a weak dollar and strong yen relative to where we are today.