Mulţi se minuneaza cum SUA poate imprumuta trilioane si trilioane de dolari. Cine este dispus sa imprumute SUA, mai ales in conditiile crizei actuale? Datoria totala a SUA se apropie de 11,2 mii de miliarde de dolari, adica 11.200.000.000.000 dolari. Autoritatile americane sustin ca datoria totala ar putea ajunge la 17,2 mii de miliarde dolari pana in anul 2019. Si mai uluitoare este suma de bani pe care guvernul SUA o plateste in fiecare an ca dobanda pentru datoria atrasa. Dobanda pe anul trecut s-a ridicat la suma de 452 miliarde de dolari, reprezentand cea mai mare categorie de cheltuieli federale dupa bugetul sanatatii si cel al apararii.
Care sunt motivele economice din spatele deciziei de cumparare a titlurilor emise de guvernul american? Exista mai multe entitati care cumpara titlurile de stat americane: fonduri mutuale, guverne straine, investitori individuali, fonduri de pensii, fonduri de hedging si chiar banci centrale. China detine aproximativ 739 miliarde dolari din datoria SUA, Japonia detine aproximativ 635 miliarde dolari in timp ce un numar de alte tari (inclusiv Marea Britanie, Brazilia si Rusia) detin peste 100 miliarde dolari din datoria SUA. Recent, chiar si banca centrala americana (FED) a anuntat un plan de achiziţionare a 1,2 mii de miliarde dolari in obligaţiuni guvernamentale si ipotecare. Iata si entitatile care detin in prezent cele 11 bilioane dolari din datoria SUA:
De ce exista un astfel de apetit pentru obligatiunile guvernamentale americane? Principalul motiv – titlurile de stat emise de SUA sunt considerate cele mai sigure si cele mai lichide investitii din lume. Daca sunteti un guvern strain si doriti sa plasati 50 de miliarde de dolari, ce opţiuni aveti cand toleranta fata de risc este zero? Va ganditi la investitii in valuta, aur, petrol sau actiuni? Cel mai probabil, astfel de investitii desi lichide se pot dovedi a fi foarte volatile. Atunci va ganditi la investitii imobiliare? Ele s-au dovedit a fi destul de nelichide si volatile. Daca doriţi un somn fara griji, veti alege titurile de stat americane. De ce altceva ar fi atat de dorite aceste titluri de stat, chiar si cand randamentul este extrem de redus sau chiar inexistent? Fiindca in acest moment investitorii sunt interesaţi in conservarea capitalului.
Se va pierde vreodata apetitul pentru titlurile de stat americane? Este o posibilitate. Ar fi un scenariu apocaliptic pentru guvernul SUA, si ar duce probabil la hiperinflaţie. In cazul in care China ar decide sa realocheze o mare parte din portofoliul de dolari in euro, declinul dolarului ar provoca pierderi masive la banca centrala a Chinei. O devaluare de 20% a dolarului in fata Yuanului ar costa China mai bine de o suta de miliarde de dolari. Se stie ca atunci cand un debitor datoreaza bancii o suma incredibil de mare, datoria devine problema bancii.
Va veni o zi cand SUA isi va achita datoria, sau se va inlocui la infinit vechile datorii cu datorii noi?
Toni,
I like the article. I wondered about that fact especially thinking that the DOW is +10k but the $ deppreciated 25% or so it is rather 7500$. Anyway, I do have a question: Is it true that in 2006, the FED seized reporting the numbers on the M3 monetary aggregate? Wondering if there might be a black sheep on that issue reflecting inflationary pressure down the pipeline.
Thank you,
Bogdan
Bogdan,
Appreciate your loyalty. As you know the USD story is the now famous carry trade. Except MXN and ARS, everything else is strengthening against the greenback.
On the M3 issue, you are correct sir. Some people say that M3 numbers bring very little marginal benefit above M2 numebers. Traders use the rule of thumb: M3 = CPI + GDP. As far as I know, people stopped using M3 as main interest rate variable few years ago. I kind of agree with that. Since M3 = M2 + jumbo CD, you can get an idea of the money supply indicator from M2. I would not jump on the band-wagon of conspiracy theory, at least not on this subject.
Over the subject of national debt, budget deficit, and the related trade deficit, I tend to be more optimistic.
Or maybe I’m pessimistic because of the pessimists.
There is one cause for the Great Depression that is rarely heard of in the debates nowadays. After WWI America was the big manufacturing powerhouse, not different from what China is today. They were extremely efficient in producing a lot of goodies, and the war ravaged European economies needed just these goodies to fix themselves. But they didn’t have much money. No problem, America was willing to lend. Just like China is doing today.
And at some point, in 1928, America decided to lend less. Just like China could start buying less Treasuries today.
The rest of the story is familiar: fewer buyers, companies with diminished cashflows, then the stock buble burst, the Smoot-Hawley act, and the Great Depression.
What was the alternative? Should America have kept lending ad infinitum? No, it should just switched from buying debt to buying other assets.
What is the solution today? To cut the budget defficit? No, the government, just like a corporation, can choose the best way of funding itself. Currently debt is very cheap, so why not? Should the government cut wasteful spending? That’s for sure, but it should do so even if it had a budget surplus.
What should China do? Keep buying American paper (be it treasuries or agency MBS)? Not forever. It should switch to buying American companies and real estate at some point. And then, when the Chinese internal consumption will be large enough, it can stop having a trade surplus altogether, if they so wish.
This is a very rosy picture. What can go wrong? Well, the only thing to fear is the fear itself. But I don’t want to get there… I might scare you … boo
Viorel,
I am not an expert in tariffs, but it is my understanding that on a long-run, there is no statistically significant correlation between the economic cycle and the tariff levels. I was wondering, in case Obama cannot get the manufacturing jobs back, would he sign-up for another wave of protectionsim? In that case, the only major buyer of US debt would be the mighty Fed. To me, there is nothing wrong with that.
You should write a piece about protectionism and globalization.
I see nothing wrong with tariffs, and I am an advocate of globalization. Most people think this is impossible.
It’s not, and it’s actually very logical.
Pro-globalizations activists say that offsourcing creates value, and tariffs destroy value. The textbook example goes something like this: an American worker can make a cell phone for $40, and an American consumer is willing to buy it for $60. Let’s say the phone exchanges hands for $50, so each has gained from the transaction $10.
Now enter a Chinese worker. He can make the phone for $20, he sells it to the American consumer for $40, and each gains $20 out of this transaction. Overall globalization creates a net value of $20. Therefore globalization is good. If you impose tariffs, you don’t allow this value to be created, ergo tariffs are bad.
But the equation is like that: relatively speaking, the Chinese worker gains $20, the American consumer only $10 and the American worker loses $10.
Globalization advocates point out that the loss of the American worker is more than compensated by the cumulative gain of the other two guys, which is $30. Moreover, the two guys can bribe him: the consumer buys the phone for $45, and the Chinese hands $10 to the American worker and he’s still better off by $15.
But for some reason this happens only in textbooks, never in the real life.
Well, it could, if this $10 was imposed as a tariff, and the Government remembered to hand it to the American worker.
With such a tariff I would be very happy. The real world tariff is totally different, of course, but why don’t people look at the picture this way?
Viorel,
In theory everything looks so easy. As you know, those who write the texbooks forget to calibrate their findings with the reality. In a nutshell, I am a strong believer in “What You Pay Is what You Get”. I would be willing to pay for an American product as long as that translates into additional quality. Until then, I am trying to maximize the price-quality relationship. Conceptually, I would vote for a global tariff-free market under one condition: all governments should eliminate all their domestic subsidies. Until then, the protectionsm is up for grabs.
Toni,
How do you feel about the idea of the U.S. Would Be Rated “Junk” if it were a company right now ?
Mark Faber is pointing that now US is in the situation when “additional debt growth, does not to lead to any additional GDP growth” (Bloomberg) So what’s left is monetizing debt or defaulting … where do you stand concerning this ? The issue is very interesting (at least for me).
Bogdan
Bogdan,
By definition, US could not be rated BB+ or below, in a million years. Theoretically, it could lose the AAA status. However, I doubt it will ever go all the way down to the junk level.
Describing SciFi scenario, Marc Faber is entitled to his opinion.
We can discuss this subject for days, but I have no problem with US debt whatsoever.
Toni,
What happens if a country (whether it is US, Greece etc) defaults on its debt ? I mean what’s next …
M Faber mentioned regarding the US rating that “if it were a company” … how does that differ from being rated as a country ?
Also he explains the presumably junk rating by saying “if you add all the unfunded liabilities the US has in terms of future liabilities raising from Medicare, Medicaid and SS” … then if it would be a corporation, could be considered a “Junk” rating. The liabilities issue sounds pretty logic for me.
Daniel
Daniel,
Don’t buy everything you hear around. Get real!
Just like a corporation, a country COULD default on its debt.
Unlike a corporation, a country CANNOT go out of business.
Got that?
Do you know what is the probability of default associated with a junk bond?
If Faber’s model seems logical to you, why don’t you do back-of-the-envelope calculation?
Furthermore, you could put your money where your mouth is and do exactly what N. Taleb claims every day: short the US Treasury. Good luck!
Toni,
Exactly because it sounded weird I did ask for your input.
Just if you know that who went for “junk” corporate bonds (not even country x,y bonds) last year, did have booms and not busts , you can derive the fact that US can’t go that low especially now that the recovery is taking place. No genius in that at all.
Besides this, even in the most prosperous bull markets for years, both for financial markets and the real economies, you could have heard “voices” predicting the end of the world.
There is no “optimal” moment when everything is “perfect”, but it looks like there are always people who take weaknesses of something whatever it is, as prospect disasters that shall follow up.
Just like an athlete after an injury is weak and can’t jump right after for the gold medal again, the US economy is in convalescence and it will take some time to eliminate impurities, but it doesn’t mean it will get “injured” again now or tomorrow.
Anyway, Marc Faber was right with the rally since February when he started projecting it, but this one is hard to follow.
Bogdan
Bogdan,
There is a “smart” guy around (N. Taleb) who is preaching the total collapse of the US Treasury paper.
He does not have a clue of what is going on in the world of finance.
Toni,
I read some really short fragments from his lately statements, but I didn’t get to read what are the arguments, logic or some exotic econometric model that may come in as support in his view.
Can you help please ?
Bogdan
Bogdan,
As you know Taleb has been a very controversial figure for the last decade. Not only his “Black Swan” theory attracts scores of praise and criticism, but also does his “fight” against Wall Street mathematicians and statisticians bring a kind of “notoriety”.
My point was strictly regarding his repeated remarks, including the ones in Davos – Switzerland, that every single trader in the world should short US Treasury bonds indefinitely. To me, is is completely moronic. Period.
Toni,
What if SCI-fi, indeed all traders will start shorting US T’s ? What happens in the process ?
Daniel
Daniel,
If all traders short UST then someone has to buy them. Just like Bank of England did with the GBP in 1992.