Wednesday, September 2, 2009


"The Treasury Department, responding to growing demand from China and other investors, will boost the sale of inflation-protected bonds that hold their value as consumer prices rise. ... The decision to increase sales of Treasury Inflation-Protected Securities, or TIPS, is part of a broader effort to ensure there is enough demand for Treasury bonds to help the US fiinance its swelling budget deficit. ... Chinese officials had indicated they want inflation-protected securities, especially as the US economy starts to recover. 'Inflation is the No. 1 worry,' said Marc Chandler, global head of currency strategy for Brown Brothers Harriman & Co. [BBH] 'This is the government saying, "we will take that inflation risk away from you,'''," Rob Copeland and Maya Randall at the WSJ, 6 August 2009, link:

We'll know China is "serious" when it demands US "gold notes". Even better, the real McCoy, gold. Apparently BBH learned something in 47 years, since Robert Roosa had the Treasury issue "Roosa Bonds", my 8 November 2007 post: Better TIPS than yuan Roosa bonds.

1 comment:

Anonymous said...

Why not the Fed get into the currency trading business too?