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#1
10-18-2007, 06:05 AM
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BFI xpost: Japan and China lead flight from the dollar
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#2
10-18-2007, 06:16 AM
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Re: BFI xpost: Japan and China lead flight from the dollar
  
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#3
10-18-2007, 06:25 AM
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Re: BFI xpost: Japan and China lead flight from the dollar
This has been out there forever and been discussed on this forum several times over the years. From the article:
Mr Ostwald warned that US bond yields could start to rise again unless the outflows reverse quickly. "Woe betide US Treasuries if inflation does not remain benign," he said. Here's a link to a long term char of the 10 yr US treasury bond: US 10 Year Treasury Chart During the time when the current account deficit was increasing, yields actually fell on the 10 year. Also not that when the U.S. underwent it's period of high inflation in the 70's the yield on the 10 year rose to something like 15%. When Paul Volker became chairman of the Fed with his stated goal to "break the back" of inflation and carried out a highly restrictive monetary policy to do so, the 10 year peaked in yield (bottomed in price). During the disinflationary period from the early 80's recession until now, we've seen a long steady decline in the yield of the 10 year to something fairly close to mid 60's yields. I'm not much of chart reader but this chart suggests to me that the yield on the 10 year has a lot more to do with inflation expectations than on the current account deficit.
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#4
10-18-2007, 06:36 AM
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Re: BFI xpost: Japan and China lead flight from the dollar
[ QUOTE ]
I'm not much of chart reader but this chart suggests to me that the yield on the 10 year has a lot more to do with inflation expectations than on the current account deficit. [/ QUOTE ] adios, just look at a same chart (measuring the same economic factor) with a different scope (in years) and you will see that you can use charts to "predict" whatever you want!
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