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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: mishedlo who wrote (28348)3/11/2005 6:37:51 AM
From: russwinter  Read Replies (2) of 110194
 
<What is happening is rather obvious: There are a bunch confused and frightened bureaucrats out there. One set wants to get rid of US$ while they are "still worth something" another set from the same country is scared to death that exports will dry up if the US$ crashes. Those are the conflicting goals and the cause of those conflicting statements.>

I think that is correct, although I would also add that these players may be doing this deliberately as a warning to the US to start defending it's currency. Plus the fact is, that the recent data shows that the Asians FCBs simply aren't quite as active. They are backing away at the margin, and many are slowly diversifying. Note I didn't say dumping, I said backing away, translate slowing purchases US securities (except for two strange weeks with the big agency transactions).
Message 21124331
They were MIA this week, and combined with the Fed not being aggressive, look what happened to the bond market. It's all about intervention (buying US Old Maid Cards). Don't intervene, and things start to swoon, as the financing needs of the US are immense, and appears to be getting even worse.
marketwatch.com
This is not the kind of environment where the US will get even more vendor financing from Asians.
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