Aug

29

A couple of weeks ago we had a back and forth about the bond market's behavior. I want to add one more possible explanation to my list of "whys." I read a pundit last night arguing that the iMarkets have a ton of foreign reserves … and that's why this won't be a repeat of 1998. Interestingly, this is possibly bearish for US Treasuries. That is, the iCOUNTRIES may be selling their treasury holdings to support their currencies in the face of capital flight and a growing balance of payments deficit. This might continue until they run out of money and are forced to have violent devaluations. Just a thought…


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