us default could be disastrous choice for.., page-6

The Fed/US govt owns just less than 50% of the US debt ($7tril). China owns $1tril.

What if the Fed/US govt trades in the treasuries they own for interest free treasuries, while other holders (eg China) are left with interest bearing treasuries? Or simply they forgive the $7 tril whether it be all at once or slowly over time? (I guess these changes might be seen in two ways: some may see it as the US debt level just dropped from 100% to 50% of GDP, others may see it as a default or desperation and start dumping the dollar).

What if say no-one was willing to buy US treasuries at 4%. Can simply the Fed come in and buy up all the treasuries and thereby will the US bond auctions always be successful? Even more than this can they use Carribean banking centres or London to buy treasuries on the Fed's behalf and make it look like others are buying the treasuries besides the Fed.

European countries like Greece can't do this, they are subject to what foreign/internal bond buyers are willing to accept. The Fed provides a fall back buyer if no-one else is willing to buy their bonds.