I Got the Fed to Release Its 2011 "Treasury Default" Playbook

Re:I Got the Fed to Release Its 2011 "Treasury Default" Play... by immibis on Tuesday November 07, 2023 @04:38PM (#38183234)

That would be a reach. The non-reaching interpretation is the face value one: the validity of the public debt ... shall not be questioned. It's hardly the most anti-market law around - the US has farm subsidies, and some countries even have price controls.

[ Parent | on HN ]

Re:I Got the Fed to Release Its 2011 "Treasury Default" Play... by ndriscoll on Tuesday November 07, 2023 @07:23PM (#38185117)

What would that even mean though? Bonds are sold at auctions, and already sell at a price different from face value. The difference determines the yield.

You could have "no one questioning the validity" but people are still going to either not participate in the auction, or bid only for high yields.

[ Parent | on HN ]

Re:I Got the Fed to Release Its 2011 "Treasury Default" Play... by jjeaff on Thursday November 09, 2023 @10:31PM (#38214758)

One of the factors in evaluating a case is whether the proposed remedy is feasible or even possible. I'm not sure what forcing everyone else to "consider valid" a government bond that is not being honored.

Do you arrest and imprison anyone who reveals that they are not getting paid on their bond at maturity? Do you force buyers to buy it at face value, even though they know it will not be honored?

[ Parent | on HN ]