Home › Forums › Financial Markets/Economics › Day of reckoning looms for the U.S. dollar
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Nor-LA-SD-guy.
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May 20, 2009 at 11:25 PM #15737May 21, 2009 at 1:27 AM #403593
CA renter
ParticipantIf the U.S. loses its AAA credit rating, it (technically) means the govt will have to pay higher rates in order to borrow (sell Treasuries). It means the U.S. has a higher risk of default than another country that is AAA-rated.
We’ve been hearing rumors about this for awhile, so nobody really knows if anything really comes to pass. We’ve pretty much convinced many other countries (most who matter) to do the same thing via quantitative and qualitative easing. There seems to be some resistance now to go further, but again, it remains to be seen what happens outside of the rhetoric.
Disclosure: long Swiss Treasuries (who are basically in the same boat)
May 21, 2009 at 1:27 AM #403847ParticipantIf the U.S. loses its AAA credit rating, it (technically) means the govt will have to pay higher rates in order to borrow (sell Treasuries). It means the U.S. has a higher risk of default than another country that is AAA-rated.
We’ve been hearing rumors about this for awhile, so nobody really knows if anything really comes to pass. We’ve pretty much convinced many other countries (most who matter) to do the same thing via quantitative and qualitative easing. There seems to be some resistance now to go further, but again, it remains to be seen what happens outside of the rhetoric.
Disclosure: long Swiss Treasuries (who are basically in the same boat)
May 21, 2009 at 1:27 AM #404086ParticipantIf the U.S. loses its AAA credit rating, it (technically) means the govt will have to pay higher rates in order to borrow (sell Treasuries). It means the U.S. has a higher risk of default than another country that is AAA-rated.
We’ve been hearing rumors about this for awhile, so nobody really knows if anything really comes to pass. We’ve pretty much convinced many other countries (most who matter) to do the same thing via quantitative and qualitative easing. There seems to be some resistance now to go further, but again, it remains to be seen what happens outside of the rhetoric.
Disclosure: long Swiss Treasuries (who are basically in the same boat)
May 21, 2009 at 1:27 AM #404144ParticipantIf the U.S. loses its AAA credit rating, it (technically) means the govt will have to pay higher rates in order to borrow (sell Treasuries). It means the U.S. has a higher risk of default than another country that is AAA-rated.
We’ve been hearing rumors about this for awhile, so nobody really knows if anything really comes to pass. We’ve pretty much convinced many other countries (most who matter) to do the same thing via quantitative and qualitative easing. There seems to be some resistance now to go further, but again, it remains to be seen what happens outside of the rhetoric.
Disclosure: long Swiss Treasuries (who are basically in the same boat)
May 21, 2009 at 1:27 AM #404294ParticipantIf the U.S. loses its AAA credit rating, it (technically) means the govt will have to pay higher rates in order to borrow (sell Treasuries). It means the U.S. has a higher risk of default than another country that is AAA-rated.
We’ve been hearing rumors about this for awhile, so nobody really knows if anything really comes to pass. We’ve pretty much convinced many other countries (most who matter) to do the same thing via quantitative and qualitative easing. There seems to be some resistance now to go further, but again, it remains to be seen what happens outside of the rhetoric.
Disclosure: long Swiss Treasuries (who are basically in the same boat)
May 21, 2009 at 8:05 AM #403618bsrsharma
ParticipantChina Grows More Picky About Debt
“..China has been exchanging one dollar-denominated asset for another — selling the debt of government-sponsored enterprises like Fannie Mae and Freddie Mac in a hurry to buy Treasuries. While this has been clear for months, new data shows that China is also trading long-term Treasuries for short-term notes, highlighting Beijing’s concerns that inflation will erode the dollar’s value in the long run as America amasses record debt.
So China’s rising purchases of Treasuries do not represent the confident bet on America’s future that they might seem to be on the surface. For instance, China does not appear to be dumping euros or yen to buy Treasuries,..”
May 21, 2009 at 8:05 AM #403872ParticipantChina Grows More Picky About Debt
“..China has been exchanging one dollar-denominated asset for another — selling the debt of government-sponsored enterprises like Fannie Mae and Freddie Mac in a hurry to buy Treasuries. While this has been clear for months, new data shows that China is also trading long-term Treasuries for short-term notes, highlighting Beijing’s concerns that inflation will erode the dollar’s value in the long run as America amasses record debt.
So China’s rising purchases of Treasuries do not represent the confident bet on America’s future that they might seem to be on the surface. For instance, China does not appear to be dumping euros or yen to buy Treasuries,..”
May 21, 2009 at 8:05 AM #404110ParticipantChina Grows More Picky About Debt
“..China has been exchanging one dollar-denominated asset for another — selling the debt of government-sponsored enterprises like Fannie Mae and Freddie Mac in a hurry to buy Treasuries. While this has been clear for months, new data shows that China is also trading long-term Treasuries for short-term notes, highlighting Beijing’s concerns that inflation will erode the dollar’s value in the long run as America amasses record debt.
So China’s rising purchases of Treasuries do not represent the confident bet on America’s future that they might seem to be on the surface. For instance, China does not appear to be dumping euros or yen to buy Treasuries,..”
May 21, 2009 at 8:05 AM #404169ParticipantChina Grows More Picky About Debt
“..China has been exchanging one dollar-denominated asset for another — selling the debt of government-sponsored enterprises like Fannie Mae and Freddie Mac in a hurry to buy Treasuries. While this has been clear for months, new data shows that China is also trading long-term Treasuries for short-term notes, highlighting Beijing’s concerns that inflation will erode the dollar’s value in the long run as America amasses record debt.
So China’s rising purchases of Treasuries do not represent the confident bet on America’s future that they might seem to be on the surface. For instance, China does not appear to be dumping euros or yen to buy Treasuries,..”
May 21, 2009 at 8:05 AM #404319ParticipantChina Grows More Picky About Debt
“..China has been exchanging one dollar-denominated asset for another — selling the debt of government-sponsored enterprises like Fannie Mae and Freddie Mac in a hurry to buy Treasuries. While this has been clear for months, new data shows that China is also trading long-term Treasuries for short-term notes, highlighting Beijing’s concerns that inflation will erode the dollar’s value in the long run as America amasses record debt.
So China’s rising purchases of Treasuries do not represent the confident bet on America’s future that they might seem to be on the surface. For instance, China does not appear to be dumping euros or yen to buy Treasuries,..”
May 21, 2009 at 8:35 AM #403628peterb
ParticipantWouldnt be too quick to call this a recovery just yet. Another hard dive in the markets and the US$ will probably rise strongly. All currencies are abused at this point in time. If anything, I would think gold will emerge more strongly over the next few years. But world commerce still trades in US$. This will probably not change when fear and risk aversion re-enter the markets.
May 21, 2009 at 8:35 AM #403881ParticipantWouldnt be too quick to call this a recovery just yet. Another hard dive in the markets and the US$ will probably rise strongly. All currencies are abused at this point in time. If anything, I would think gold will emerge more strongly over the next few years. But world commerce still trades in US$. This will probably not change when fear and risk aversion re-enter the markets.
May 21, 2009 at 8:35 AM #404120ParticipantWouldnt be too quick to call this a recovery just yet. Another hard dive in the markets and the US$ will probably rise strongly. All currencies are abused at this point in time. If anything, I would think gold will emerge more strongly over the next few years. But world commerce still trades in US$. This will probably not change when fear and risk aversion re-enter the markets.
May 21, 2009 at 8:35 AM #404179ParticipantWouldnt be too quick to call this a recovery just yet. Another hard dive in the markets and the US$ will probably rise strongly. All currencies are abused at this point in time. If anything, I would think gold will emerge more strongly over the next few years. But world commerce still trades in US$. This will probably not change when fear and risk aversion re-enter the markets.
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