Caroline100

Understanding Negative Bond Yields

For short-term treasuries it must be that they are seen as safer than cash itself. Cash has counterparty risk.

Dollar Strength: An Illusion

Three reasons I see dollar strength

1. the negative effect of the recession on the CA deficit
2. the negative effect of deleveraging on the real money supply (I imagine more than an offset to recent liquidity injections)
3. prices falling faster in the US than major trading partners

If the carry-trade using USD funding is not completely unwound yet, and in addition European banks continue to unwind their USD loans to emerging markets and Europe itself, that would be another reason.