It’s nice to see an occasional heavy hitter join you out on a limb. Noted academic Niall Ferguson has a similar read on the the dollar and treasury market as yours-truly. In a “look back” at 2009, the professor predicts:
Contrary to conventional wisdom, the quadrupling of the deficit did not lead to falling bond prices and rising yields. Instead, the flight to quality and the deflationary pressures unleashed by the crisis around the world drove long-term yields downwards. They remained at close to 3 per cent all year.
Nor was there a dollar rout, as many had feared. The foreign appetite for the US currency withstood the Fed’s money-printing antics, and the trade weighted exchange rate actually appreciated during 2009.
