The Economist on Treasuries and a picture, worth 1,000 words

Couple of things we MISSED this morning, as we’re still dusting the cob webs off the webpage and PC …


First, from the Economist Magazine – print edition – the following article is worthy of ‘posting’ so as to have for a good weekend-read:


Not so risk-free 


There are questions about the long-term appeal of American Treasury bonds


America does not formally need to default to penalise its creditors; it can simply let its currency decline. Short-dated Treasury bonds (those with a maturity of one-to-three years) have returned a healthy 18% in dollar terms over the last three years. But when translated into Chinese yuan that return dwindles to just 0.3%.


So what might replace Treasury bonds as the global risk-free asset? Some would opt for gold, although it pays no yield and its nominal value is highly volatile. China has no asset that seems appropriate. What about German government bonds? Fiscal policy is relatively prudent and the European Central Bank seems far more committed to fighting inflation and maintaining a stable currency than other monetary authorities.


Next up, our colleague Lynda in Seattle brought the following to our attention and we couldn’t help but pass it along as it truly shows how bad things are, here in the USofA at the moment:

It is definitely getting very bad out there       


(Cat’s are so  dramatic)




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