U.S. bonds face gloomy future (re: foreign ownership of US treasuries)

[salin]

U.S. bonds face gloomy future

Selling continuing to increase, led by foreign investors

By Jenny Wiggins
FINANCIAL TIMES

LONDON, Sept. 7 — The U.S. bond markets have had a rough few months, with an intense bout of heavy selling that started in mid-June knocking government debt prices sharply lower. But the markets are already considering the prospect of an even gloomier future. Many market participants say more selling is on the cards, this time led by foreign investors.

OVER THE PAST DECADE, foreign investors have been gathering up increasing amounts of U.S. debt securities.

Foreigners now own one-third of the U.S. Treasury market, up from one-fifth eight years ago, according to Merrill Lynch.

In recent years, Asia has become the most noticeable buyer of Treasury debt. Japan is the largest holder of Treasury securities, owning some $442bn at the end of June, followed by the UK with $123bn and mainland China with $122bn.

Lehman Brothers says the Asian region now accounts for some 39 per cent of international purchases of U.S. bonds, nearing the 43 per cent owned by Europe.

More: http://www.msnbc.com/news/963087.asp?0si=-

[GreenGreenLimaBean]

1. sounds like an old fashion run at the bank...

Can you say 10% mortgages by '04??? I can.

[bemildred]

2. Lessee, 39 percent plus 43 percent = 82 percent.

Hmmmm.

[IMayBeWrongBut]

3. that leaves 18 percent for

Africa, austrailia, South Amrerica, Canada and Mexico sounds reasonable...

[The Magistrate]

4. This Is The Price

Paid for the looting of the public Treasury by the criminals of the '00 Coup. Their crony capitalism has made U.S. bonds a poor investment: real capitalists know the bill comes due, and must be settled in cash.

[benfranklin1776]

5. Indeed sir it is a heavy price.

The chief cabalist, Junior, insisted this evening that we must pay to rebuild Iraq
and he will be asking for a mere 87 billion. Hey when your annualized deficit is 500 billion and climbing what's
a few billion more added on top. "Put in on that tab!" he says, no problemo. Except it is a problem
because whenever someone overspends on their credit card like a drunken sailor the bills come
due and the creditor demands payment and, yes, even the good ol USof A has to pay its debts just
like an overdrawn Visa holder. Trouble is though when you can't pay your debts and are plunging
deep into the financial hole, as the US Government is since the lunatics are running the financial
asylum, you will reach a point inevitably where no one wants to lend you money anymore because you
are not a good credit risk. Looks like we have arrived at that situation in a shockingly short
time! Yet another depressing milestone reached for the flight suit cowboy whose MBA training has
apparently been for nothing since his fiscal policy has been a shining textbook example of how
to royally screw things up BIG TIME! As the noted economist Paul Krugman has observed: "When the
adults do one day get back in charge they are going to have one heck of a mess to clean up."

[salin]

12. A week or so ago.... wasn't there a 'warning' from the IMF

to our government, about our fiscal policies and huge deficits. No teeth to the warning - but I can't remember than ever happening before.

[benfranklin1776]

13. Yes quite right indeed.

We were lectured on our deteriorating financial condition in a tenor they normally reserve for their arrogant derision exhibited to third world nations. To them we are apparently rapidly becoming yet another banana republic.

See e.g.

http://www.nytimes.com/2003/09/02/opinion/02TUE4.html?ex=1063080000&en=3dd5057930323a22&ei=5062&partner=GOOGLE

and

http://www.democraticunderground.com/articles/03/09/04_super.html

[scsifreak]

14. No nation or state has ever...

... become rich by paying off it's debt. Can you say 'default'?

Honestly, there is risk in everything. It's about time they were reminded of it.

[htuttle]

6. Time for Plan B

[The Magistrate]

7. Indeed, Mr. Tuttle

These miscreants leave themselves little choice but that financial equivalent to Madame Guillotine. Sensible investors will come swiftly to prefer Euros.

[bemildred]

8. I believe it is a printing press, Sir.

Not that the Guillotine would not be apropos.

[The Magistrate]

9. My Expression, Mr. Mildred

Is sometimes too oblique for my own good. It was my intent to liken the antique shown to the old widow-maker made famous at the same period.

[bemildred]

10. I have that fault also, Sir.

[htuttle]

11. On the bright side

With credit cards, electronic funds transfer and ATM machines, hyper-inflation has never been more convenient.

There's no more need to take a wheelbarrow or clumsy sacks of cash when you go grocery shopping.

[femmecahors]

15. At first I thought that was a guillotine . . .

That would work just as well, maybe better than your printing press.

[reprobate]

16. What a shame the Codpiece Cowboy didn't read these boards

Some of us predicted these very same problems over a year ago. It doesn't take an MBA or advanced economics degree to know the consequences of accelerating and uncontrolled long term debt. Just simple arithmatic.