I read with interest Yahoo Finance's website article entitled "Dumbest Moments in Business 2009 .... Mid Year Edition". The most interesting story of the article was the report where Mr. Timothy Geithner, the US Treasury Secretary, equivalent rank of a Finance Minister, gave a talk to students at the Peking University.
It seems that Mr. Geithner was asked to comment on the safety of China Investments in US Government Bonds (Treasury Securities), to which he replied that they are "very safe".
The audience then burst out laughing as they possibly doubted the US Treasury Secretary's reply.
If University Students in China don't think the US Government Bonds are safe, how long can the US Government continue to borrow money at such a low interest rate level?
In fact, it was reported recently that foreigners had sold off about US$54 billion of Treasury Securities, which caused the Bond Yields to rise significantly. Again, another sign that US and World Interest Rates cannot be maintained at such low levels for long.
In my mind, the important question is not whether interest rates will remain at current levels, but rather, "How high, Interest Rates will rise in the next two years?"
Best wishes,
Ooi
It seems that Mr. Geithner was asked to comment on the safety of China Investments in US Government Bonds (Treasury Securities), to which he replied that they are "very safe".
The audience then burst out laughing as they possibly doubted the US Treasury Secretary's reply.
If University Students in China don't think the US Government Bonds are safe, how long can the US Government continue to borrow money at such a low interest rate level?
In fact, it was reported recently that foreigners had sold off about US$54 billion of Treasury Securities, which caused the Bond Yields to rise significantly. Again, another sign that US and World Interest Rates cannot be maintained at such low levels for long.
In my mind, the important question is not whether interest rates will remain at current levels, but rather, "How high, Interest Rates will rise in the next two years?"
Best wishes,
Ooi
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