Thread

1. 1over137 · 1789747701 · focus · HN ↗

   US everything has become unappetizing for everyone outside the US.

   1. carefree-bob · 1789750030 · focus · HN ↗

      This is nonsense. The rest of the world holds 9.7 Trillion in Treasuries and this amount increased by $500 billion over the last year.

      So the opposite of this article is true. You can get all the data from the Z.1 release.

      Please don't take these types of flame bait articles seriously or try to spin up an entire world view based on them as you will end up not only directionally wrong, but believe in the exact opposite of reality.

      FYI, that $500B increase in treasury holdings is not the whole picture, there are also the agencies (housing mortage backed securities guaranteed by the govt) and foreign holdings of those also increased by $70 billion over the last year, and are about 1.5 Trillion.

      1. bflesch · 1789750224 · focus · HN ↗

         Institutional investors are very slow to adapt, so I wouldn't take their continued investment as a positive signal. The sentiment shift is real, and a lot of goodwill has been spent.

         It's basically divide and conquer on a national scale tearing down the democratic world police and the democratic systems it supported.

         1. carefree-bob · 1789751178 · focus · HN ↗

            The point is that the entire article is wrong, factually.

            In terms of institutional investors and sentiment, I think you are fundamentally not understanding why the rest of the world holds US debt, it is to support running trade surpluses. That is a core economic need of much of the world, and as long as there is that need, you will see foreign government accumulation of dollar denominated assets.

            For some reason people either refuse to understand simple balance of payment accounting constraints or they are deeply offended by them, and want to live in a world in which moral outrage determines things like global capital flows.

            But we do not live in that world. The reason why the rest of the world accumulated a trillion of dollar denominated assets last year, split roughly 50/50 between private and public, is solely because China needed to run a trillion dollar trade surplus. And next year it will also need to run an even bigger surplus. That forces everything else.

            1. lokar · 1789752168 · focus · HN ↗

               Yep. The flow has to balance out somehow. If the US buys more then it sells (all in, including services, which trump ignores for no clear reason) the sellers have to end up owning USD denominated assets.
         2. quickthrowman · 1789752287 · focus · HN ↗

            There are an excess of dollars floating around internationally and only so many ‘risk free’ dollar-denominated assets. US Treasuries will continue to be purchased. There are plenty of buyers who are obligated to buy risk-free assets and US Treasuries are the vehicle of choice.

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