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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Mike Johnston who wrote (76643)12/26/2006 3:21:23 PM
From: pogohere  Read Replies (2) of 110194
 
Russ Winter was speculating on the WSE radio show the other day about where the pig men would be investing their booty. He suggested they might be buyers of US notes. Additionally, he suggested they have an interest in a relatively stable US$.

Given the amounts involved, many hundreds of billions at least, wouldn't it be ironic if this constituted a/the source for the domestic liquidity that would move bond rates lower and keep them low for a spell, as Mish suggested? It could have some effect on the US$ very short term, but since the US$ valuation is a function of global liquidity and preferences and trades about $2 tril/day, I wouldn't expect that effect to have much bearing on it.

Eventually, the pig men run out of ammo and US interest rates would climb, but I wouldn't expect that to have any effect on the US$ level either (as a result of climbing interest rates) as I imagine it will be overwhelmed by global considerations.
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