US Treasuries sell-off deepens as ‘safe haven’ status challenged
US Treasuries sell-off deepens as ‘safe haven’ status challenged
www.ft.com
US Treasuries sell-off deepens as ‘safe haven’ status challenged
26 comments
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The moves offer a new challenge to the Trump administration, which had previously cited lowering Treasury yields as a key policy aim, and could mark a loss of investor confidence in the world’s largest sovereign debt market.
“The sell-off may be signalling a regime shift whereby US Treasuries are no longer the global fixed-income safe haven,” said Ben Wiltshire, a rates strategist at Citi.
This is potentially a seismic shift in global finance/economics.
If US treasuries are no longer considered the "investment of last resort" (which they shouldn't be, since even sane Americans lack the commitment and risk tolerance to fight corruption and degeneracy in their own country), this may result in the dollar losing its status as the global reserve currency.
If that happens, the Americans will be fucked.
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I have "US defaulting on its debt" on my Trump presidency bingo card. No one knows what happens if it comes to that.
I also have "US testing a nuclear warhead" on there, for what it's worth.
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Trump on treasury
We’re even looking at Treasury. There could be a problem—you’ve been reading about that, with Treasuries, and that could be an interesting problem because it could be that a lot of those things don’t count. In other words, that some of that stuff that we’re finding is very fraudulent, therefore maybe we have less debt than we thought of. Think of that!
source: https://www.ft.com/content/7757e480-6aae-4a61-986e-52a2c2690f91
don't count = default
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US treasuries is literally what we used in university as the "risk free rate"
When you have government officials saying they want to default on the "risk free" bonds it undermines markets in a completely unprecedented way.
Shockingly stupid.
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I don't think most people understand how critical this is. US treasuries losing safe haven status is the type of thing that will be taught in history books 80 years from now.
It will be like learning about Gavrilo Princip in 2025. Seemingly "meaningless" tedious historical facts, but at a closer look Princip (indirectly) shaped the course of much of human history in the 20th century.
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When you have government officials saying they want to default on the "risk free" bonds it undermines markets in a completely unprecedented way.
Shockingly stupid.
That last statement accurately describes the constituents of those government officials and large swathes if the American electorate. The fact that it's politically viable to muse about these things is so fucking idiotic . So many Americans owe their safe and prosperous lives to things of which they are completely ignorant.
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Hi. American here. Us losing our reserve currency status is all I've wanted for half my life. It will be the deathblow to this evil fking empire and I can't wait to see it happen.
I know I'm boned. But knowing that the world at large can finally move beyond the regressive pull of the US gives me hope for the future.
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The problem here is we don't have a better successor to our shitty system. China is likely to become the next dominant super power but we all know how fucked they've been to the Uyghurs, the Nepalese, India with border skirmishes, Asian mercantile boats through naval clashes, and practically every other country with their Wolf Warrior diplomacy. If fledgling markets thought US hegemony sucked, just think how China will treat them. They don't give a fuck about soft power.
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Same.
Shit sucks for us, but lifting the US boot off the neck of the world will make up for it.
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Not just the American will be fuck. It will be a financial meltdown.
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On one hand I agree with you. This won't only impact the US. Perhaps we'll get hit harder than the Americans (at least some parts of the world).
On the other hand I would argue the rest of the world is much more connected on a visceral level. The Americans have their feet and legs, when the world uses meters and centigrade. American prices are always provided on a list basis (and local oligarchs and their shills constantly lie that modern software solutions can't apply local tax adjustment algorithms on a dynamic basis), the rest of the world has true prices (only in English would one have to clarify what you mean by true prices).
I am not saying that only Americans will get fucked, but the rest of the world has a measure of dynamism that Americans don't (not to mention a much higher tolerance to challenges).
Perhaps there are some long terms benefits to Trump's behaviour. We can find alternative to American-style corruption and degeneracy. While there are many sane Americans, they also need to take a more sober attitude to their current situation and be willing to take risks and be less arrogant about "home of the brave" and similar polemics.
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Sounds healthy in the long run. We have way too much financial economy leeching off of the real economy. It needs to melt down to a reasonable size.
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Euros or rmb as the new reserve currency? Place your bets now (literally if you like).
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for context: The UK holds $723 billion in U.S. Treasuries, just behind China (excluding Hong Kong) at $759 billion. Canada has $379 billion, Belgium $375 billion, and France $332 billion, while Japan tops the list with $1,059 billion. This substantial investment offers significant leverage, creating numerous possibilities for retaliation or withdrawal and global chaos.
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That would make the dollar plummet and instantly end the furious import market, with no need for tariffs. With a devalued currency, it would make the country appealing to install industry back, even if low value at first, to soak up the throngs of unemployed.
And the current administration would wave away ratings and anything relating to international entitities and gladly default on their creditors, to pull everyone down.
These guys are mad but their madness has a method.
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Amazing. trump never ceases to do the stupidest, most idiotic, cruel, batshit fuckery imaginiable to cheering throngs of idiotic, cruel, batshit fucks.
26 comments