I generally agree with you in that historically treasuries and USD have been the lowest risk asset and thus the place to go in a panic. But markets are forward looking and people will always try to predict what will perform better, rather than just rely on past data. The current conditions in terms of the gap between inflation rate and interest rates, and in terms of total debt to GDP ratio have never been seen before. Bond and Treasury holders have never lost this much of their principal before.
I don't see a path for the dollar to regain the credibility that it had before. It might take a long time to transition because much of the market is forced buyers (either the fed itself, or funds that are mandated to hold a percentage of bonds, for example) but the trajectory is clear. As monetary inflation looks more and more unavoidable, fiat as a safe asset will look less enticing. Instead, assets like commodities, real estate, gold, or even bitcoin will look more desirable. Everyone now knows that in the next crisis, the fed will go hard into money printing and monetary inflation will follow. The market will front run that by buying the assets and driving up the price ahead of inflation, which takes a while to slosh around the entire economy.
> you as an American are a shareholder of the Federal Govt. and as a shareholder you also benefit
I'm not sure how I'm a "shareholder". I'm a citizen yes, but there is no equity. There is however an incredible amount of debt relative to GDP (about 130%). If we were a public company, the equity would be worthless and we would be insolvent, as such a high amount of debt relative to a slowly growing revenue (GDP) is impossible to overcome. But as a fiat based country, we can avoid bankruptcy with money printing and monetary inflation.
> Powell said that inflation wasn't transitory but people decided to lend to those solid entities
It isn't PEOPLE who are doing the lending, for the most part these days. The Fed itself was buying $120 billion a month on the open market of treasuries and mortgage bonds plus 4 trillion or so to kick things off. This action is to create new credit and liquidity for the people. The general trend is the the percentage of debt held by the central bank goes higher as the currency gets weaker and debt becomes more of a problem. In the past, when rates were more attractive and debt was lower, then yes, people made up a larger portion of government debt holders.
I don't see a path for the dollar to regain the credibility that it had before. It might take a long time to transition because much of the market is forced buyers (either the fed itself, or funds that are mandated to hold a percentage of bonds, for example) but the trajectory is clear. As monetary inflation looks more and more unavoidable, fiat as a safe asset will look less enticing. Instead, assets like commodities, real estate, gold, or even bitcoin will look more desirable. Everyone now knows that in the next crisis, the fed will go hard into money printing and monetary inflation will follow. The market will front run that by buying the assets and driving up the price ahead of inflation, which takes a while to slosh around the entire economy.
> you as an American are a shareholder of the Federal Govt. and as a shareholder you also benefit
I'm not sure how I'm a "shareholder". I'm a citizen yes, but there is no equity. There is however an incredible amount of debt relative to GDP (about 130%). If we were a public company, the equity would be worthless and we would be insolvent, as such a high amount of debt relative to a slowly growing revenue (GDP) is impossible to overcome. But as a fiat based country, we can avoid bankruptcy with money printing and monetary inflation.
> Powell said that inflation wasn't transitory but people decided to lend to those solid entities
It isn't PEOPLE who are doing the lending, for the most part these days. The Fed itself was buying $120 billion a month on the open market of treasuries and mortgage bonds plus 4 trillion or so to kick things off. This action is to create new credit and liquidity for the people. The general trend is the the percentage of debt held by the central bank goes higher as the currency gets weaker and debt becomes more of a problem. In the past, when rates were more attractive and debt was lower, then yes, people made up a larger portion of government debt holders.