HN user
Here are some numbers: the core of the massive distortion is in govt debt. This was in Fall of 2014 where half of govt debt yields less than 1%, it's actually gotten worse since.
http://www.bloomberg.com/news/articles/2014-09-04/almost-hal...
Negative(?!) yield 10-years.
http://www.reuters.com/article/2015/04/08/swiss-treasury-idU...
Anyone would be hard-pressed to say that this is a well functioning market.
It's probably a good idea to try to quantify the actual _scale_ of what is happening.
http://www.zerohedge.com/news/2013-11-26/chart-day-how-five-...
Monthly data from the treasury: http://www.treasury.gov/resource-center/data-chart-center/ti...
Foreign net purchases of US long-term debt: http://www.treasury.gov/resource-center/data-chart-center/ti...
More info: http://www.treasury.gov/resource-center/data-chart-center/ti...
Debt held by public is $11.918T.
China owns 10.7% of all treasury debt, Japan 9.5%, and all foreigners hold 46.9%. I imagine we're making the world a little nervous right now.
Wouldn't go as far to say as the US will implode, but Fed QE has greatly distorted financial and real estate markets. The Fed has pumped over $3 trillion into the bond markets since the financial crisis and are currently buying at a pace of $1.02 trillion per year. Since the US govt has never done this before, no one knows the consequences of these actions. There are dissenters within the Fed itself over QE, notably Fisher, and he has recently talked about this, um, predicament. http://www.dallasfed.org/news/speeches/fisher/2013/fs130805....