Dumping US Bonds...

[BearBones]

China reminds me of a puppy, a bit clumsy, not entirely housebroken and with a tendency to chew its master's slippers when annoyed.  I wonder what kind of dog it will grow into.

Like the analogy. But one can also argue that the US has been the clumsy one lately, an aging pit bull that is increasingly being bullied by the dachshund and poodle next door, not to mention many of the new puppies of the neighborhood.

[MediumTex]

China reminds me of a puppy, a bit clumsy, not entirely housebroken and with a tendency to chew its master's slippers when annoyed.  I wonder what kind of dog it will grow into.

Like the analogy. But one can also argue that the US has been the clumsy one lately, an aging pit bull that is increasingly being bullied by the dachshund and poodle next door, not to mention many of the new puppies of the neighborhood.

Everyone's fortunes are constantly in the process of rising and falling.

The U.S. has probably not been any less clumsy than other superpowers in world history.  It's a tough job. 

[KevinW]

China reminds me of a puppy, a bit clumsy, not entirely housebroken and with a tendency to chew its master's slippers when annoyed.  I wonder what kind of dog it will grow into.

I see what you're going for, but the puppy analogy rankles a bit since China's been around so much longer than the USA has.

IMO China is like Dr Who: they've existed since the start of time; get reinvented often which dooms them to reinventing history; and they make a lot of sudden grand gestures, half of which turn out to be based on ancient wisdom, the other half of which are theatrics for their own sake.

[MediumTex]

China reminds me of a puppy, a bit clumsy, not entirely housebroken and with a tendency to chew its master's slippers when annoyed.  I wonder what kind of dog it will grow into.

I see what you're going for, but the puppy analogy rankles a bit since China's been around so much longer than the USA has.

IMO China is like Dr Who: they've existed since the start of time; get reinvented often which dooms them to reinventing history; and they make a lot of sudden grand gestures, half of which turn out to be based on ancient wisdom, the other half of which are theatrics for their own sake.

How about an old grumpy inscrutable dog that occasionally bites people?

The whole prospect of a bunch of communists who went to the "Art of War" school of diplomacy leading a modern capitalist economy sounds like an idea for a CBS prime time drama (except it might actually be entertaining).

[KevinW]

It sure is weird huh!  It's hard to make sense of all the contradictions.

[Drewskers]

Bill Gross had some pertinent words on this topic today, in two different venues:

http://money.cnn.com/2011/06/08/markets ... e_business

Note the debt and dividend recommendations Gross makes in this piece:

http://discuss.morningstar.com/NewSocia ... upons.aspx

[BearBones]

The U.S. has probably not been any less clumsy than other superpowers in world history.  It's a tough job. 

Exactly. That's why they are not superpowers any more... Really think US policies of materialism, dependency on foreign oil, massive debt, overextension of military, and inability to make tough political choices will lead us in a different direction?

[MediumTex]

The U.S. has probably not been any less clumsy than other superpowers in world history.  It's a tough job.  

Exactly. That's why they are not superpowers any more... Really think US policies of materialism, dependency on foreign oil, massive debt, overextension of military, and inability to make tough political choices will lead us in a different direction?

Of course not.

The questions are timing and succession.

[MediumTex]

Clive,

You think the euro will make it to 2020?

I think the whole idea of a currency that is not connected to a sovereign entity is doomed from the start.

[Pkg Man]

I agree with Clive that the Euro will survive, but at the expense of individual and national freedoms. I have a great deal of suspicion in the supra-national governmental structure they are creating.

[cabronjames]

but at what point would anyone here consider dumping US bonds and moving into bonds from our relatively stable neighbor to the north or some basket of intl bonds?

Short answer yes, would consider, but for us USians with funds at a US custodian, the following doesn't exist AFAICT, or exists at a non-US exchange (such as Toronto Stock Exchange) & has cost-prohibitive commissions/fees
1 nation-specific LT bond funds, eg. a Canada sovereign bond version of TLT with similar avg maturity & duration
2 even if #1 doesn't exist, an ex-US index of LT bond funds
3 direct purchase of a 30 year sovereign Canadian bond without exorbitant minimum purchase size or cost prohibitive fees.

as the childhood saying goes "I might if I could but I can't so I won't"

--

It is amazing to me that such obscure assets, like Corn futures inverse leveraged -3X (I might be exaggerating, but not by much), are available as ETFs, yet there is no Canada, Switzerland, S Korea, Germany, etc version of TLT that trades on a US exchange. *smh*  Perhaps there really is not enough investor interest to make such an ETF have the minimum economies of scale needed to run?

[Jan Van]

Debt: $12.8B
Domestically owned : $8.89B ~ 69%
Foreign owned: $3.88B ~ 31%

Chart: http://www.mint.com/blog/trends/who-own ... splay=wide

Also fun to read: Be Careful What You Wish For: the Balanced Budget Amendment

[quote=Be Careful What You Wish For: the Balanced Budget Amendment]Everyone can appreciate that the intention of a proposed balanced budget amendment (BBA) would be to impose some discipline on government. Today, there is absolutely no operational constraint on government spending, and the debt ceiling is just a legislative choice.

Most people also believe that there is at least some long-term constraint on government spending as we are always hearing about government debt and our need to borrow from China (etc.) to cover our profligacy. Yet, the cause and effect are the other way around. The US government, like all truly sovereign governments, issues its own currency. Therefore, it doesn’t need loans from China to spend. Rather, it creates the currency, which is sent by exporters to China, before China can “lend it back”? to us.[/quote]