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When Safe Assets Are No Longer Safe

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The Angry Bear


  • The U.S. has long benefitted from its ability to issue “safe assets” to the rest of the world.
  • A fall in the demand for U.S. Treasury bonds by foreign banks and private holders would contribute to lower bond prices and higher yields.
  • All this could affect the Federal Reserve’s policy moves if the Fed thought that it needed to factor lower foreign demand for Treasury bonds into their projections.

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By Joseph Joyce

The U.S. has long benefitted from its ability to issue “safe assets” to the rest of the world. These usually take the form of U.S. Treasury bonds, although there was a period before the 2008-09 global financial crisis

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The Angry Bear profile picture
In 2010 24/7 Wall St. named Angry Bear among the top twenty independent financial blogs on the net. Quote: "The Angry Bear www.angrybearblog.com. Half a dozen professionals, including a tax law expert, a historian, PhDs in economics, business consultants and financial professionals provide perspectives on the financial world. Despite their expansive coverage of economic issues, their articles are as deep as their coverage is extensive. Topics include world trade, industrial production, U.S. Government programs, and major regulatory issues." 2010 FINS from The Wall Street Journal named Linda Beale's Ataxingmatter in The Top Five Tax Accounting blogs to read for 2009-2010. Our current economists are Mike Kimel, Spencer England, Robert Waldmann, and Rebecca Wilder. Linda Beale is an expert in tax law and matters related to taxes. Ken Houghton has expertise in finance. Bruce Webb has added his expertise in particular on Social Security. Daniel Becker brings a small business perspective to his writing. Daniel Crawford: aka Rdan and Angry Bear blog Bios in alphabetical order: Linda Beale: I am a law professor at Wayne State University Law School who teaches various courses in the area of federal income tax, such as introduction to federal income tax, corporate taxation, partnership taxation, international taxation and perhaps in the future a course in statutory interpretation focussed on tax. Daniel Becker: I have two businesses: a practice in the health care field and a retail business of flowers and plants. I have served as an officer of 2 non-profits and my state society. I have testified before my state legislature. I have personally won in my state supreme court. Ken Houghton: A principle in his own company and former economist for several major financial companies. Spencer England: Before I started my own consulting business I was an economist for the CIA for 10 years and worked for a couple of Boston investment management firms as their in house economist, investment strategist for some 12 years. My original field of study was international economics and international finance. I celebrated the 20th anniversary of publishing SEER -- my equity strategy product. I model the S&P industries and advise portfolio managers on how to structure their portfolios by recommending industry weights. Mike Kimel: Formerly an economist for a Fortune 500 company and now an economist for a private corporation and author of Presimetrics blog and the book Presimetrics: How Democratic and Republican Administrations Measure Up on the Issues We Care About to be published August 2010. The book can be pre-ordered. RobertWaldmann: I have a PhD in economics (Harvard 1989) and teach economics at the University of Rome "Tor Vergata". Oddly, I don't blog much at my own site rjwaldmann about economics or Italy. As an economist (roughly) I am interested in behavioral economics, growth, and the economics of inequality. Actually much of my current research, such as it is, is really in econometric methodology and statistics. I was very unorthodox in the 80s, but the orthodoxy is much less rigid now. Bruce Webb: is a current member of the National Academy of Social Insurance (NASI). I am by training a historian who then has spent my working career in information retrieval and land use regulation. My interest in Social Security arose when I noticed in passing that the dates related to 'crisis' were moving but that nobody seemed to be noticing that and still less asking the key questions 'why?' and 'can this go on?' Rebecca Wilder: After receiving my Doctorate in Economics, I was an assistant professor for two years. However, I realized that teaching just wasn't for me and took a job in private sector. Now, I am an Economist in the financial industry. As an economist in finance, I analyze data, write commentary, and offer economic insight to traders, chiefs of staff...

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Comments (2)

The Demand for U.S. Treasuries will it loose its' alternative currency purpose ?
Like most Demand situations if you are wanting something > Get-it !
Ya don't don't get-it ?
There are many ways to get it and only a few that won't cause you legal stress .
So to buy is one way : what do u`use to buy with ?
Again there are many ways depending on the "Trust and Good Faith " the supplier is willing to . In the end , ultimately the transaction is complete with the willingness and satisfaction that all parties are happy.

Sounds simple doesn't it : yah however the market is not so simple . The best way to achieve a complex market is to have a strong currency or the equivalent of the currency which could be Government Bonds . How simple yah , but it's not .
Presimetrics, "the book of to be published in August of 2010 [sic] and can be preordered"?

The entire Angry Bear bio seems to be more than 10 years old. How about an update?
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