Tether Is Buying U.S. Treasuries En Masse

Apr 3, 2023

온라인 슬롯 사이트

Several governments decided to get rid of their U.S. treasury bonds and Tether is there to buy all of it.

Tether Is Now The Largest Buyer Of U.S. Treasuries

According to Gabor Gurbacs, a strategy advisor at VanEck Associates Corporation, foreign central banks are selling their U.S. treasuries. One of the main buyers is Tether, the asset-backed stablecoin. Gurbacs noted that if Tether were a country, it would be among the top 30 holders of U.S. treasuries. This is a significant development as Tether’s involvement in U.S. bonds is growing, while foreign central banks are liquidating their holdings.

Foreign central banks are selling U.S. Treasuries. Tether is buying a lot of U.S. Treasuries.

U.S. leadership should appreciate Tether for buying and holding U.S. treasuries.

If Tether was a country, it’d be among the top 30 holders of U.S. treasuries.

Chart from:

— Gabor Gurbacs (@gaborgurbacs)

Foreign Central Banks Are Changing Their Investment Strategy

A report that foreign central banks have been liquidating treasury holdings to mitigate the banking turmoil. The report highlighted that foreign holdings of treasury securities have declined by $76 billion in the week through March 22 to $2.86 trillion, the largest weekly decline since 2014. This development signals a potential shift in foreign central banks’ investment strategy, as they move away from U.S. bonds.

Fleeing or a Precautionary Measure?

Joseph Abate, the Managing Director of Barclays, stated that the “borrowing was precautionary”, and the central bank did not want to fire sell its Treasuries. This suggests that foreign central banks are proactively mitigating banking turmoil, and building up cash reserves in case the banking crisis deteriorates. It is a precautionary measure that aims to avoid a fire sale of U.S. treasuries.

Tether Might Help The U.S. In Stabilizing The Economy

Gurbacs commented that US leadership should appreciate Tether for buying and holding U.S. treasuries. Tether’s investment in U.S. treasuries could provide stability to the market and help offset the decline in foreign central bank holdings. However, it remains to be seen whether Tether’s investment in U.S. treasuries will continue to grow, or whether it is a one-time occurrence.

The Potential Impact On The Us Economy

Willem Middelkoop, a popular investor, shared a graph of the U.S. treasuries sold by foreign central banks. Middelkoop suggested that the Federal Reserve would have to be a buyer soon, and debt monetization is the nuclear option. This indicates that if the US economy continues to experience a decline in foreign central bank holdings, the Federal Reserve may have to intervene to prevent an economic downturn. Debt monetization could be a possible solution, but it carries significant risks.

Conclusion

In conclusion, Tether’s investment in U.S. treasuries is a significant development in the investment landscape. However, the decline in foreign central bank holdings signals potential risks for the US economy. As the situation continues to evolve, it remains to be seen how Tether’s investment in U.S. treasuries will impact the market, and whether the Federal Reserve will intervene to mitigate potential risks.

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