Interesting theory given the historical body of evidence that pushes foreign investment TO treasuries during periods of uncertainty. I guess given the source of uncertainty is the US, it stands to reason that it might be different this time. Not prodding at you by any means, in fact the opposite. It will be a good data point to see if the sentiment that has led investors TO US treasuries during uncertainty was confidence in the dollar/US or confidence that the US would always print the world out of recessions. I don't think we're going to do the latter in this case.themissinglink said:
My guess is yields keeps going up for a bit as foreign investors leave US markets due to uncertainty.
I think dumping implies negative intent. Which may be present in their motives but it's not the full reason. China issued 1T yuan in special bonds in 2024 to stimulute domestic investment. They're bumping that number to 3T yuan for 2025 with a significant reason for the bump being the need to offset impacts of the tariffs placed on China by the US. It may be that China is eating a bit of its seed corn as well to fund some of this spending.Yukon Cornelius said:
I could be mistaken but I thought I saw something saying China was no longer buying and dumping. Could be enough to cause the rates rise.
I've never been tempted by bonds before but these rates are looking pretty enticing. Any of y'all looking to buy some?
pfo said:
I anticipate Trump will be making deals with almost all of the countries affected by his tariffs, plus deals with companies moving their manufacturing to the USA. As these deals are announced, I would expect interest rates to drop.
Sapper Redux said:pfo said:
I anticipate Trump will be making deals with almost all of the countries affected by his tariffs, plus deals with companies moving their manufacturing to the USA. As these deals are announced, I would expect interest rates to drop.
Why would anyone trust Trump's deals or the United States right now? I'm not trying to be political with this, there's little reason to believe anything he says regarding tariffs and trade.
I don't think they'll liquidate the debt as much as they'll lower it according to trade imbalance.Farmer @ Johnsongrass, TX said:
China holds almost 7% of U.S. total debt. That's down a couple percentage points since Nov 2024. I would worry to much about China selling all U.S. debt. JMO
Sapper Redux said:pfo said:
I anticipate Trump will be making deals with almost all of the countries affected by his tariffs, plus deals with companies moving their manufacturing to the USA. As these deals are announced, I would expect interest rates to drop.
Why would anyone trust Trump's deals or the United States right now? I'm not trying to be political with this, there's little reason to believe anything he says regarding tariffs and trade.
pfo said:Sapper Redux said:pfo said:
I anticipate Trump will be making deals with almost all of the countries affected by his tariffs, plus deals with companies moving their manufacturing to the USA. As these deals are announced, I would expect interest rates to drop.
Why would anyone trust Trump's deals or the United States right now? I'm not trying to be political with this, there's little reason to believe anything he says regarding tariffs and trade.
An interesting thing happened when Trump made his over the top tariffs proposals. Everybody got to see what would happen to the stock in their companies if Trump's draconian tariffs are ever enacted. And I believe that is why most of the 130 tariffed countries have asked Trump to negotiate and that they would be willing to eliminate all tariffs if Trump would too. So Trump got everyone's attention and I believe his unorthodox methods will produce a world with greatly reduced tariffs on the USA. Also Trump is responding to CEO's asking for more time. He is delaying tariffs for certain critical products and giving companies some time to reshore manufacturing.
Something had to be done. Everything can't be made overseas, some by our primary adversary. Our middle class is being hollowed out and we can't depend on China to made our antibiotics, iPhones and other critical products.
flashplayer said:Sapper Redux said:pfo said:
I anticipate Trump will be making deals with almost all of the countries affected by his tariffs, plus deals with companies moving their manufacturing to the USA. As these deals are announced, I would expect interest rates to drop.
Why would anyone trust Trump's deals or the United States right now? I'm not trying to be political with this, there's little reason to believe anything he says regarding tariffs and trade.
Not trying to be political. Sure.
pfo said:Sapper Redux said:pfo said:
I anticipate Trump will be making deals with almost all of the countries affected by his tariffs, plus deals with companies moving their manufacturing to the USA. As these deals are announced, I would expect interest rates to drop.
Why would anyone trust Trump's deals or the United States right now? I'm not trying to be political with this, there's little reason to believe anything he says regarding tariffs and trade.
An interesting thing happened when Trump made his over the top tariffs proposals. Everybody got to see what would happen to the stock in their companies if Trump's draconian tariffs are ever enacted. And I believe that is why most of the 130 tariffed countries have asked Trump to negotiate and that they would be willing to eliminate all tariffs if Trump would too. So Trump got everyone's attention and I believe his unorthodox methods will produce a world with greatly reduced tariffs on the USA. Also Trump is responding to CEO's asking for more time. He is delaying tariffs for certain critical products and giving companies some time to reshore manufacturing.
Something had to be done. Everything can't be made overseas, some by our primary adversary. Our middle class is being hollowed out and we can't depend on China to made our antibiotics, iPhones and other critical products.
That is basically my theory. In times of global uncertainty, we have the most stable markets in the world and it results in a net capital in-flow, particularly in bonds. Globalization has driven investors to the US due to our (i) low trade barriers, (ii) relatively stable political climate, and (iii) stable currency. Being the global reserve currency has been a huge boom to the US capital markets that I don't think many people appreciate (including the current administration). I think foreign investors are re-thinking their allocations and a bit more is going to other regions (though would still prefer our market to others, just less so).Sims said:Interesting theory given the historical body of evidence that pushes foreign investment TO treasuries during periods of uncertainty. I guess given the source of uncertainty is the US, it stands to reason that it might be different this time. Not prodding at you by any means, in fact the opposite. It will be a good data point to see if the sentiment that has led investors TO US treasuries during uncertainty was confidence in the dollar/US or confidence that the US would always print the world out of recessions. I don't think we're going to do the latter in this case.themissinglink said:
My guess is yields keeps going up for a bit as foreign investors leave US markets due to uncertainty.
Quote:
Do you think China should be making almost all our antibiotics? Today, China cut off the export of of 7 rare earths to all countries. These 7 are only refined in China and they are critical for the manufacture of magnets and other high tech goods for the defense industry and high tech electronics. What if China cuts off antibiotics next?
Getting the thread back on track with the Treasuries...Yukon Cornelius said:
As I understand it countries don't buy US bonds for us market exposure. They buy them as a form of cash.
With the amount of debt upcoming I see the dumping and stagnant buying from Asia as an extension of the trade war as its mechanism they can deploy.
What I'm curious about is over the next several months does this environment provide a once in a life time 20 year bond buying opportunity?
SteveBott said:
When did citizens vote to increase their taxes the most is 90 years? I missed that.
Trump had a majority of the popular vote and the electoral vote. The whole cover for Congress not acting on the tariffs despite their statutory requirement to do so is because of the "mandate"SteveBott said:
And they did not win the majority of the vote.
SteveBott said:
And they did not win the majority of the vote.
