James Pethokoukis

Thanks Washington! Why dollar weakness will continue

October 21, 2009

The great Andy Busch of BMO Capital Markets effortlessly explains the link between the current anemic state of the dollar and America’s terrible fiscal situation:

America’s new love affair with Treasury bonds

August 18, 2009
The always perspicacious Andy Busch of BMO Capital Markets notes how US households are suddenly into bonds — and then looks around the corner:
This has been the major, major shift in the structure of the US Treasury market that was unanticipated. From Q1, US households held $643.9 billion in Treasury debt and that is up from $256.6 billion in Q4 2008. Households bought an astounding 84% of new US Treasury issuances in Q1. The total holdings represent about 1% of US household assets. According to the WSJ, “Although that is the highest since 2001, Treasurys regularly made up 5% of assets in the 1950s, and as recently as 1995 they were 2.6% of assets. History suggests there is plenty of room for households to increase their holdings.”