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ProShares UltraShort 20+ Year Treasury Message Board

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  • snugly60031 snugly60031 Sep 2, 2010 6:48 PM Flag

    Portfolio Reallocation could send TBT soaring

    Japan could cure their high Yen/low Dollar problem by dumping their US treasury holdings. They may be second only to China as foreign holders of US debt, and China has been unloading theirs. That would overwhelm Fed's ability to keep rates low through buying treasuries. The Fed knows they would throw the World economy into chaos if they attempted to print enough new money to buy the bonds sold by them. Moreover, if Japan started selling that would cause others to sell and there would be a run on US debt. Instead, the Fed would grudgingly raise rates to protect the Dollar. Japan's currency cross problem would be solved.

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    • When the Fed buys US Treasuries, they are simply monetizing the debt...but when these pesky foreign banks keep buying them, they are thinning the supply and making yields go lower and lower.

      What are they waiting for? They are sitting on huge profits from where they accumulated them at. They need to start dumping, taking profits and investing in their own countries.

      Hoarding treasuries do them no good, do the U.S. no good and is bad for the global economy.

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