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Old 09-17-2016, 04:51 PM   #21
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So you're saying US bonds are riskier than EU and Japan?


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US bonds are not that high, if you know the Government insured bonds at 7 - 8℅ please let us know.
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Old 09-17-2016, 07:00 PM   #22
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No I think you misunderstood my point.


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Old 09-18-2016, 10:01 AM   #23
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No I think you misunderstood my point.
.....
I think, the reason you find US bonds higher that EUR or JP bonds is there is an expectation that the USD which is high will come down, so for foreigners that invest in US bonds the currency risk is higher than investing in their own bonds.

For Americans, investing in US bonds carries no currency risk, unless you are very rich where you have lots of choice and millions to invest, then you see the risk and expect to be compensated.

So in a sense, some people feel the US is risky compared to EUR or JP.
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Old 09-18-2016, 07:52 PM   #24
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So here's something that expands on Sunsets suggestion above.
https://www.quora.com/Why-do-US-T-Bo...pean-countries


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Old 09-19-2016, 07:21 AM   #25
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I think, the reason you find US bonds higher that EUR or JP bonds is there is an expectation that the USD which is high will come down, so for foreigners that invest in US bonds the currency risk is higher than investing in their own bonds.
As a EUR citizen, It's not even the expectation that the USD might go down.

It's the certainty that I cannot predict what will happen, be it up, down or sideways.

And a little bit of taxation issues - but that's a different story.
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Old 09-19-2016, 05:29 PM   #26
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There are three economic giants in the world US, EU and China. There is no Gold standard to back the currency since 1971 and money value,safety etc tied only to GDP(s). So investments in different assets, including bonds, increases money value and world demand for it. On the other hand most trade in the world involves US$ and Euro while Yuan just enters the world reserve currency status on October 1st. IMF currently has reserve currency basket at 40% US$, 30% Euro, 10% Yuan and remaining 20% Yen and GB Pound. Current nominal GDP: US is#1, Euro is #2 and China is#3. The problem all other currencies may face is that China is already GDP measured by Purchase Power Parity ahead of any other world economy. According to IMF even in Nominal GDP China is set to be equal or ahead of US by 2020. It means that the 10% world reserve currency status will not fit the Yuan / Chinese Government. If Yuan share of trade is going to grow then at what currency expense? If for example unneeded Euro will start going back to EU, it will trigger much higher than normal inflation. In order to avoid it US, EU, GB etc would need to keep their rates higher what not every National Budget can afford. Please correct me if I am wrong.
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Old 09-19-2016, 07:09 PM   #27
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So,thanks to all that contributed ideas. I learned that the EU and Japan central banks are purchasing a significant portion of sovereign debt, and with not a lot left for those that must buy EU or Japan bonds by charter, they must compete for what is left, thus really distorting the market price or yields.

Others have EU dominated bills so for 1% won't leave EU denominated investments.

I guess to my original question, it seems that faster growth would impact exchange rates.
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