Foreigners Are Fleeing From Treasury Bonds, But It’s Probably Not Trump’s Fault

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Bloomberg reports that foreigners are tripping over themselves to unload their holdings of US treasuries:

In the age of Trump, America’s biggest foreign creditors are suddenly having second thoughts about financing the U.S. government.

….From Tokyo to Beijing and London, the consensus is clear: few overseas investors want to step into the $13.9 trillion U.S. Treasury market right now. Whether it’s the prospect of bigger deficits and more inflation under President Donald Trump or higher interest rates from the Federal Reserve, the world’s safest debt market seems less of a sure thing — particularly after the upswing in yields since November. And then there is Trump’s penchant for saber rattling, which has made staying home that much easier.

….Combined with the unpredictability of Trump’s tweet storms, interest-rate increases in the U.S. could further sap overseas demand….Right now, it’s just “much easier to stay home than go abroad,” said Shyam Rajan, Bank of America’s head of U.S. rates strategy.

Hmmm. The age of Trump? According to the Treasury Department, the selloff started in June:

Preliminary figures from Japan suggest that December will be much the same as November, which means foreigners will have sold off nearly a half-trillion dollars worth of treasuries in six months. That’s 7 percent of their total holdings. The only other time there’s been a selloff this sustained was at the tail end of the dotcom boom.

But is it Trump’s fault? Nobody thought he had a chance of winning until November, so it’s hard to see how he could have caused uneasiness with federal debt back in June. I don’t imagine Trump has done the US debt market any favors, but on this score, at least, I suspect he’s getting more blame than he deserves.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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