Negative Interest Rates Implications - deflationary and inflationary

Good lord... UK 10Y yield was 5.2+% in June of 08. It's 2.5% now. Bond strike?

And fine - let's just talk about the US - the world's largest government bond market. My question to you stands.

And no, it's not my opinion. It's a known phenomena amongst all non-present rates/currency/macro traders in the world.

If you don't know (and there's no shame in it; just ask) - don't pretend to be an expert.

Quote from morganist:

Your theory is not backed up by the facts. In the UK there was a bond strike. The US might be different but that will change.
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Quote from DontMissTheBus:

Good lord... UK 10Y yield was 5.2+% in June of 08. It's 2.5% now. Bond strike?

And fine - let's just talk about the US - the world's largest government bond market. My question to you stands.

And no, it's not my opinion. It's a known phenomena amongst all non-present rates/currency/macro traders in the world.

If you don't know (and there's no shame in it; just ask) - don't pretend to be an expert.
More...


There was a bond strike a couple of years ago in the UK. I think it will happen again in the same market conditions.
 
Can you focus on the question at hand rather than keep trying to divert to the "future" where you can posit anything?

Either you know, or you don't. And if you don't, perhaps you should stop pretend to be an "inventor of aggregate demand controls"

Quote from morganist:

There was a bond strike a couple of years ago in the UK. I think it will happen again in the same market conditions.
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Quote from DontMissTheBus:

Can you focus on the question at hand rather than keep trying to divert to the "future" where you can posit anything?

Either you know, or you don't. And if you don't, perhaps you should stop pretend to be an "inventor of aggregate demand controls"
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It is difficult to say which reason. There are many. I assume that you mean that countries with trade surpluses are investing in other countries?
 
The question is, WHY do countries with trade surpluses purchase so much US treasuries at such unattractive yields. There is a one main reason. It's the correct reason because it's a technical reason well understood by all participants of the macro markets and the central banks of those countries that undertook the purchases.

Stop dancing around. If you don't know, you don't know.

(sorry OP for hijacking this thread - hope your original question was answered well enough)

Quote from morganist:

It is difficult to say which reason. There are many. I assume that you mean that countries with trade surpluses are investing in other countries?
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Quote from DontMissTheBus:

The question is, WHY do countries with trade surpluses purchase so much US treasuries at such unattractive yields. There is a one main reason. It's the correct reason because it's a technical reason well understood by all participants of the macro markets and the central banks of those countries that undertook the purchases.

Stop dancing around. If you don't know, you don't know.

(sorry OP for hijacking this thread - hope your original question was answered well enough)
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All oil is purchased in dollars. Do you mean that? Or that they use it as a reserve currency?
 
That's one aspect of it; dollar is the reserve currency - but why does that mean some (of the largest) exporting countries need to buy tons of us treasuries at a yield that will surely come to haunt them in the years to come?

Again - there's indeed a technical answer to this.

Quote from morganist:

All oil is purchased in dollars. Do you mean that? Or that they use it as a reserve currency?
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Quote from DontMissTheBus:

That's one aspect of it; dollar is the reserve currency - but why does that mean some (of the largest) exporting countries need to buy tons of us treasuries at a yield that will surely come to haunt them in the years to come?

Again - there's indeed a technical answer to this.
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They also need to buy oil in the long term. They need currency for this.
 
Do you mean chimerica or the need to support the US economic to maintain their demand?
 
BZZZZZZ. Wrong. Fail.

Since you will probably argue that anything I say as my "opinion", I'll instead point you to this WSJ article that does a good job of explaining it: http://online.wsj.com/article/SB122806735083967109.html

In short - China needs to keep buying US treasuries to main their currency competitiveness in order to maintain their trade surplus.

Now, please stop pretending to be an expect on macro economics.

Quote from morganist:

They also need to buy oil in the long term. They need currency for this.
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