Brazil and Canada were among big sellers of Treasurys in the latest month for which data is available and the previous year, catching analysts off guard and raising speculation that quieter nations may be concerned about investing in the U.S.
h/t Erik Larsen
This is completely unsurprising. National interests are national interests. I can’t imagine why Canada would sit by and watch your investments get inflated away by somebody who thinks that as long as you have checks in your book, you can’t be broke.
Canada in large part due to the location has been overexposed to U.S dollar and U.S economy. There is nothing wrong with reduction of this exposure and attempts at diversification, however – today’s globe economy runs on very tight correlations, so it may not matter after all. I wonder what Canadian government is buying?
btw…Canadian banks have great reputation. If only the Conservative government would have some guts and try to cash on it, enact laws similar to Switzerland, suck as much capital as you can from the rest of the World – the standard of living in Canada would skyrocket notwithstanding global recession.
Nice article about the US-China ponzi scheme:
http://tinyurl.com/l5sgx3
Excerpt: “Imagine becoming so successful at your job that you stack up $2 trillion in income, which you conservatively place in short-term U.S. Treasury bonds for safekeeping. Now imagine that when you try to cash in those bonds to buy a few things for your kids, the clerk at the bank abruptly shuts her window and tells you to go away. That is essentially the situation faced by China these days as it wonders whether its plan to manufacture goods for U.S. consumers over the past two decades in exchange for a pile of credit slips was really such a hot idea.”
The article states that China is stuck, because it can’t start unloading the bonds quickly because their value will drop, and the US is hosed because of its debt, and historical change of focus from production to consumption.
Good times!
The article states that China is stuck, because it can’t start unloading the bonds quickly because their value will drop, and the US is hosed because of its debt, and historical change of focus from production to consumption.
Whoa, someone started talking about it! Really, whoa! I still remember being ridiculed by the “conservatives” here and there when I said exactly same thing years ago. The one who laughs last, you know…
Aaron – that is unfortunate. Peter Schiff has made the point that the US has always used debt – wisely in the 19th century to build factories, and poorly in the late 20th century to finance consumption.
There is a lot in the news lately about the recession being over – but looking forward, what does the US produce?
How does its economic engine restart now that the consumer, who provided roughly 66% of the US economic activity, is broke and jobless?
the wife came home from shopping with new toothbrushes. Handles made from recycled soda bottles, wood, or rubber. Your choice.
product made in the U.S.A.
The US is doomed in my children’s lifetime.
It’s kind of interesting – about a year and a half ago, I thought we would be experiencing significant inflation. Yet here we are with pretty low interest rates still. If interest rates rise, US homeowners with mortgages will be even more vulnerable.
The Canadian dollar looks pretty strong, but as a trading nation that’s not necessarily good. The US dollar looks enfeebled, and recovery is contingent on those low interest rates.
Tim in VT – I share your pessimism. And a society increasingly reliant on government for assistance and comfort will not remain peaceable forever if they feel the government is failing them.
the u.s. will soon cease to be the controlling power unless other nations allow them. we have natural resources up the wazoo. we can be our own masters as long as we don’t have to really defend ourselves.
all you americans out there best start reading your founding fathers not mothers and read your damn constitution. the people you have elected for years have been shitting on what has made the u.s. a great nation. when your intellect is as small as a flea you will be treted worse than a flea. f++k you are stupid. canadians are worse because they just think government control is the only way. idiots. most could not keep warm in the winter.
Countries with a nuke usually have negotiation leverage even when they are totally broke.
In that there is a lesson for Canada.
Situation is getting funnier and funnier every day: why need for a cold war now, when there are commies on both sides? What is it: Putinization or Obamization of America? Hard to tell the difference.
I thinks America needs a pill, it’s sick.
tim in vermont at August 4, 2009 3:41 PM
It is only doomed because the Hippies hold power. This will be changed in short order by the majority of teh US when they release those stinking hippies have performed a coup d’etat..