The fed is not purchasing additional bonds however they are still holding bonds they previously purchased (and have a larger then usual balance sheet - much larger). They are also manipulating the bond market via their promise to keep short term interest rates low for a very long time (it has been ~5 years so far)
In comments at private appearances, Ben Bernanke has stated that he does not expect interest rates to normalize in his lifetime. If the rate on the Japanese 10 year went to 2%, all the tax revenue of the Japanese government would not suffice to service the coupon payments. That is where the U.S. is heading, and it is no secret, merely an unmentionable elephant. Given that it is unlawful to default on the debt of the U.S. Treasury, the only possible outcome is hyperinflation: No austerity, no financial repression, no feasible growth will suffice to overcome the magnitude of the debt mountain. The debatable aspect is the timing of that hyperinflation. Everyone wants time to roll out of USD before it breaks loose.
Please, investors are running from Japan to US. They are incomparable. Do you know what a yield curve is? If you did, you would know that all that doom and gloom you're spreading is not evident at all.
We're fighting deflation, not hyperinflation. No one's "rolling out" of USD, they're flocking to it. Also, Treasury "debt" does not work like corporate or individual debt. It works more like company shares than anything else. That is, when a country's doing good (exporting) it's currency rises in price. That's what's happening to USD. It's getting bought up and the price is skyrocketing.
I'm out of this thread. There's no logic or intelligence here. Just an anti-USD, pseudo-economist, pro gold and BTC, circlejerk.
The US has a 500 Billions negative trade balance and the Dollar will be less use while there are plenty of Dollar around.