Please check out Mr. Doug Noland's Credit Bubble Bulletin for this week.
And please note this section:
March 27 – Financial Times (Song Jung-a, Andrew Wood, and Michael MacKenzie): “The world’s fifth-largest pension fund said yesterday it would no longer buy US Treasuries because yields were too low, signalling what could be a big shift by financial institutions away from US government debt into higher yielding assets. South Korea’s National Pension Service, which has $220bn in assets, said it wanted to broaden its range of foreign investment. ‘It is difficult to buy more US Treasuries because the portion of our Treasury investment is already too big and Treasury yields have fallen a lot,’ said Kwag Dae-hwan, head of global investments at the NPS.”
This is really really bad.
I've written previously that if foreigners begin to turn away from U.S. Government Debt, we are screwed on so many levels.
This is a worrisome trend worth watching. If foreigners begin to choose other assets over U.S. Debt, we are in a lot of freaking trouble!
Now I am seriously worried.