Bloomberg reports that the Danish pension fund AkademikerPension will unload its $100 million position in US Treasuries by the end of the month.
The fund managers about $25 billion in savings for teachers and the fund manager cited Trump’s attempt to take over Greenland as one of the reasons to drop the holdings but also said:
“The US is basically not a good credit and long-term the US government finances are not sustainable,” Anders Schelde, chief investment officer at AkademikerPension told Bloomberg.
I highlighted that Denmark’s central bank holds $100 billion in reserves, with about half of that likely to be in US dollars. Them and others may need to reconsider those holdings, especially after the confiscated Russian reserves and crippled its ability to use the international financial system after the invasion of Ukraine.
It’s no surprise that gold is up 1.6% and just hit another fresh record high at $4748. At the end of the day, it’s the ultimate monetary alternative and if there’s any shift out of US dollars, that’s going to be one of the places it goes.
Whether it’s Denmark or someone else, there is some heavy selling in Treasuries today. US 10-year yields are the highest since September and that’s despite three Fed rate cuts in that time. The chart looks like an inverted head-and-shoulders with a target just below 4.5%.
A big part of what’s happening in bonds is a fiscal reckoning in Japan, where 30-year yields are up 25 basis points today and risk kicking off an international crisis.
S&P 500 futures are also down 1.5%.
At the end of the day, it might be a crisis in Japanese bonds that ends up halting Trump’s imperialism. The noise is extremely loud right now and it’s going to be difficult to wade through the headlines and find an edge.
This article was written by Adam Button at investinglive.com.