Bloomberg/Liz McCormick/5-24-2020
“The rift between Washington and Beijing has moved beyond issues related to the pandemic to include angst over China’s national security actions against Hong Kong. This backrop has crimped investors’ risk appetite and bolstered demand for Treasuries as a haven. Still, bond bears aren’t giving up, emboldened by the easing of social-distancing measures across many U.S. states and by the pipeline of Treasury supply that is growing larger.”
USAGOLD note: As Mish Shedlock suggests in a post below, value relativity plays an important role in the demand for U.S. Treasuries. Still, demand for U.S. paper is dropping in some very important markets – like China and Japan – while the need for Treasury financing is soaring to record levels. As for ranking the two most demanded safe havens, this is where gold has the advantage. The supply of gold is substantially less elastic while demand from all quarters is rising.
