The Epic American Credit and Bond Bubble Laboratory Message Board

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

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To: gregor_us who wrote (25023)	1/20/2005 12:04:13 PM
From: CalculatedRisk	Read Replies (3) of 110194

Another factor is the impact of a US recession on China and their holdings of US assets. If the US slips into recession, I believe China will follow. Since their currency is pegged to the dollar, China can sell their US holdings without weakening their currency, and thereby cushion their domestic recession. This might exacerbate a treasury sell-off. This doesn't work as well for Japan since they are concerned with keeping the dollar strong against the yen. But I am concerned about how this all unwinds.

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