Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Last time I checked China owns $1.2 trillion of U.S. Treasury bonds. If it ever decided to sell, watch out. I have to think all this talk about trade wars isn't helping. Meanwhile Japan has over $1 trillion in Treasury debt too. They have powerful ownership stakes.
Written a few years ago, but I pretty good explanation of why not to worry...
Worst case scenario? The US dollar might depreciate against some other currency. That’s a long-shot but it could happen. Will that push up US interest rates? Doubtful. The US Fed determines the short rate, and the global search for safe assets plus expectations of future US Fed policy determines the longer rates.
Guess what. As we head into the next GFC (Global Financial Crisis), the US continues to look awfully good. Don’t bet against the dollar or US interest rates. Uncle Sam wears the biggest pants in the world.
Comments
china-dumps-us-treasury-bonds-paul-krugman-inches-toward