“Private Equity Placement” reportedly believe that the bubble in US Treasuries could be deflating. The European-based wealth management firm cited news that investors shunned a $10 billion government sale of 30yr bonds on concerns that US debt issues will soar thereby reducing the price of the securities.
“Private Equity Placement” sources says that the US government is going to have to issue far more debt in order to pay for all the bailouts and loan facilities being extended to financial institutions to help support the banking system..
One of the “Private Equity Placement” sources suggested that the announcement of a huge stimulus package by the Chinese government may have spooked investors who believe that it may sell a large tranche of the US Treasury bonds it holds as part of its rumored $2 trillion in foreign currency reserves which could, theoretically, cause a stampede of selling by other sovereign states.
“Private Equity Placement” are thought to have had this scenario in mind when advising clients to avoid the apparent safe-haven of US Treasuries.
