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If the FED wipes out the debts on their books they are basically sending the dollar down the shitter bankrupting the banking, insurance, and the pension systems. Not to mention you will have so many nations in the world who have large holding of treasuries getting really pissed off! The only time the FED can do this is that they own all of the bonds and that is most likely hyper inflationary. Now the only way they can get away with this (maybe) if they coordinate with the ECB, BOJ, and other Central Banks where all of them buy their own country bonds slowly over time and they wipe them out together at the same time. I suspect nothing will happen to the currencies vs each other but Gold to the furthest galaxy out there :)
