I'm Working on a Theme of Imprisoned vs. Not-Imprisoned Treasury
Holdings by foreigners, mostly CB's, when it comes to the issue of whether foreigners will dump their holdings.
For example, Japan is imprisoned with their Treasuries, imo. They cannot sell, and they have already derived the economic benefit of having accumulated them. So if treasuries go to zero, it really makes no difference whatsover. Japan printed Yen in the first place to buy the damn things, so it matters not. The effective subsidy to Japanese Business/Economy has already been made. The only issue for Japan would be political, at having "lost" .8 trillion dollars worth of holdings. But agan, so what. It was all just a card game in the first place, with Japan printing the deck. Mr Asakawa should give his blue beeper to his son, and get some rest.
The Caribbean holders of Treasuries however are not imprisoned. Their holdings are substantial. And Putin, imo, is not imprisoned either. After all, unlike China and Japan, he's got oil. And oil is money. He needs no dollars to buy commodities.
So my point is that its time to consider a little more deeply who can sell and who cannot, amidst the apocolyptic forecasts. I think the potential for selling is real, and serious, and Japan and China need not even be involved to for such selling to cut a bleeding hole in the gut of the US Treasury Market.
LP |
