Japanese Finance Minister Kaoru Yosano said his government is confident about the outlook for U.S. Treasuries, signaling the second-biggest foreign holder of the securities will keep buying them amid record sales.
China and Russia, the largest and third-largest single holders of the debt, have said they may switch some of their reserves out of Treasuries.
U.S. President Barack Obama, who is projected to quadruple the nation’s budget deficit to $1.85 trillion in the year ending Sept. 30, has tried to assuage investor concern by pledging to cut the shortfall in half by the end of his first term. Obama may borrow a record $3.25 trillion this fiscal year, almost four times last year’s amount, according to Goldman Sachs Group Inc.
Bottom line. We can have all the great dreams and plans we want, but if our major lenders stop trusting us, well, we are going to have problems!
To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs. I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes. George Dagnino, PhD
Editor, since 1977
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