• by jfengel on 3/13/2025, 1:41:17 PM

    It's an interesting theory, but it only holds if people still trust the US bond market. And with such an erratic administration, I wouldn't count on that.

    Right now bond rates are pretty high, even with the market crashing/correcting. Just because people are selling stock doesn't mean that they'll automatically switch to bonds. That used to be true, but it's a dicey thing to count on right now.

    Of course the current administration believes that it's extremely trustworthy and will salvage the economy, and make those bonds an excellent deal. That over-confidence is perhaps the best reason to believe the opposite. But an awful lot of Americans voted for this administration, so perhaps they'll make it a success anyway.

  • by muddi900 on 3/13/2025, 8:09:49 AM

    > Now, who exactly are these globalists? No one knows for sure, but Trump might be referring to foreign investors holding massive amounts of US Treasury bonds (bonds issued by the US government). Take China, for instance. The US buys more from China than the other way round, creating a trade deficit. This leaves China with excess US dollars, which it then recycles into US banks by buying Treasury bonds, essentially lending money back to America for safe returns.

    This is ridiculous.

    China, Japan, India, and everyone else buys treasury bills because it is better than holding dollars for foreign reserves.

    Not only that crashing the stock market will benefit bond holders. As all the money would flow towards bond markets.

    Which is what is happening.