According to Jenny Wiggins:
Economists fear that Asian investors, who are the largest foreign owners of US Treasuries, may cut their holdings of US government debt, withdrawing a key source of financing for America's large current account deficit.
The worries have been fuelled by recent sharp falls in the price of US government debt.
Weakness in the US Treasury market could make Asian investors "less willing" buyers of debt securities, said Marcel Kasumovich, head of G10 foreign exchange strategy at Merrill Lynch.
He said there had already been a "noticeable shift" downwards in the amount of debt issued by mortgage financiers Freddie Mac and Fannie Mae being bought by foreign investors.
Asian investors have piled into the US Treasury markets in recent years, helping to push Treasury prices high and interest rates low. China, Japan, South Korea and Hong Kong owned a combined total of about $696bn in Treasuries at the end of June, up from $512bn in December 2001, according to data from the US Treasury.
Okay, well, we'll watch things closely. I'd be worried but for the fact if I've been reading the same story -- change the names, magnitudes, dates, leave the rest just as it is -- since 1985.
Link posted by Steven : 6:25 AM |
