Phorgy Phynance

More questions on “safe haven” status of USD

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[Note: Here I am joining the flocks of bloggers pointing to their prior words of wisdom. My apologies!]

On Saturday, I wrote

Flight to non-USD quality

Over the last few weeks, being on “garden leave” has given me a great opportunity to watch recent events unfolding from the sidelines. In that time, I’ve made a lot of comments. Some of them I hope make some sense. Some of them have probably been fairly ludicrous. I’m an admitted amateur and even the pros are struggling these days. One of the most ludicrous things I’ve said was on July 25 over on NP:

I also suspect that a “sovereign” flight to quality will not be a flight to US treasuries and in fact may be a flight away from US treasuries into EUR denominated government bonds. So as the credit market turns, the typical safe haven will not be available as even treasuries get whacked from sovereign sellers.

Even worse! I’m pointing to previous things I’ve said that reference even more previous things I’ve said. How long can this continue?! (Ad absurdum? 🙂 )

Anyway, since I am knee deep already I might as well trudge along. Along this theme of non-safe USD, Econocator points out some research from Barclay’s that I found interesting:

Is the USD a safe-haven currency?

Could there be something to the idea? I think so, but what do I know?

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Written by Eric

August 14, 2007 at 10:15 pm

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