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Thursday, July 14, 2011
Re the debt, who are the dummies: the US or Chinese government?
As far as I can see, the average yield on US government debt is now below inflation. So the US government makes a profit on its debt. This is particularly true of debt held by the Chinese, which, as I understand it, is mainly “one or two years to maturity” stuff.
So who are the dummies: the Chinese for making an investment which makes a loss, or the Americans for getting worried about making a profit?