I appreciate you taking my genuine good faith pushback into serious consideration and then making the effort to respond accordingly - a level of intellectual honesty that’s all to rare these days. And if anything does change your view, certainly do let me/us know!
I think there are two questions only one purely economic: what the JP intervention does to the US yields; and what the US government is worried about. Your arguments pretty convincingly shows that the gov’t should not be too worried. It doesn’t yet mean that Bessent shares this view. Put differently: the design of the yen intervention was really strange. I don’t think we have a very good alternative explanation why the US used the euro. And other developments like the planned use of a repo facility also suggest that the US government is worried about the impact on the Treasury market even if its concerns are unfounded
I agree with your distinction. And the hypothesis you put forward is possible. But, if Bessent does share that fear, it is inconsistent with him pushing Japan to raise its interest rates since the same logic says that that could further lower the cash from Japan to the US.
I appreciate you taking my genuine good faith pushback into serious consideration and then making the effort to respond accordingly - a level of intellectual honesty that’s all to rare these days. And if anything does change your view, certainly do let me/us know!
Will do.
I think there are two questions only one purely economic: what the JP intervention does to the US yields; and what the US government is worried about. Your arguments pretty convincingly shows that the gov’t should not be too worried. It doesn’t yet mean that Bessent shares this view. Put differently: the design of the yen intervention was really strange. I don’t think we have a very good alternative explanation why the US used the euro. And other developments like the planned use of a repo facility also suggest that the US government is worried about the impact on the Treasury market even if its concerns are unfounded
I agree with your distinction. And the hypothesis you put forward is possible. But, if Bessent does share that fear, it is inconsistent with him pushing Japan to raise its interest rates since the same logic says that that could further lower the cash from Japan to the US.
Is the remainder in that last graph ($15T or so) Fed holdings and intergovernmental debts?
Yes