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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: russwinter who wrote (3175)	12/11/2003 12:19:30 PM
From: yard_man	Read Replies (1) of 110194

>>1. to defend the USD 2. to at least provide a real rate of return for creditors.<< defending the dollar -- what foreigners do -- actually lowers rates -- they buy treasuries. Foreigners haven't cared about "real returns" from their investment in treasuries for some time now -- they do care about selling us stuff -- an orderly slide is in their self-interest. What are treasuries now anyway -- paper -- so are USDs ... so many talk like one is the absolute and the other floats with respect to that -- but both are floating ... As bad as this sounds - I think the fellow who talked about outstanding debt as a balance sheet item -- that it should be ignored -- and that we should look simply at "flows" is probably right ... If you are looking for a viscious selloff in treasuries you need to ask yourself what will be the trigger -- the fact is: foreigners have been willing for some time to endure negative real returns (and add to positions) -- if you simply look at dollars -- the USD has plummetted from 120 to 88 -- where's the so-called exodus -- when is it coming??

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