http://www.bloomberg.com/news/2011-...-don-t-matter-as-debt-rallies-like-bunds.html So ... instead of buying crappy US and Euro bonds some have apparently discovered the wonderful world of BB+ bonds such as Indonesia and Turkey. The beginning of the end? US no longer considered a safe haven? "Ratings are not logical" indeed. Interesting times, finally some investors are becoming smart and realizing the US isn't all that it is. There are always alternative 'safe havens' out there apart from US treasuries.
Indonesia is pretty ok, just like brazil and mexico. Not a safe haven, but they were barely affected by gfc. Only the share investors got affected, but local economy chugged along during gfc without stimulus or intervention. But their performance really depends on social stability, which in turn is reliant on who is in power. So, smart investors will have to pay attention to their local politics. Failing to notice the shift in power basically puts your money up to the fates.
http://www.ft.com/intl/cms/s/0/fe04b354-c80e-11e0-9501-00144feabdc0.html#axzz1VoKqrDTo From the Financial Times article titled Bond vigilantes focus on ability to print money "It has always been a pretty sound rule of thumb that deflation is good for fixed interest bonds and bad for equities. But not any more. Bond markets are running scared of heavily indebted developed countries that cannot print money. The underlying logic is that no country defaults on its domestic bonds if it retains the right to set the printing presses in motion." " the Weimar Republic would presumably have been entitled to a triple A rating since it was perfectly capable of repaying its debts, even though the hyper-inflated money used for the task would have been close to worthless."
