Friday, October 24, 2008

Uh oh... joint FX reserves in Asia to ease USD dependence

just another incremental step, wonder what they are gonna fill it with? If China/Japan is serious about diversifying out of U.S. treasuries and/or live in a banking/financing world less dependent on the US, it would make sense to do it now while they are still making money on it while deleveraging and unwinding of USD carry is artificially inflating demand (after this is all over, it will be impossible to sell treasuries at 2% for a long long time!)

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