Sunday, March 04, 2007

(more) Damage Control

I seem to have come across a counter-point to the argument from the previous article I posted. I guess I can understand the opinion of Mr. Paulson saying "the $1 trillion of U.S. debt held by China and Japan amounts to just two days of trading in Treasuries." As well as the point made by Mr. Bernanke saying, "it wasn't in the interest of foreigners to dump their Treasuries. A sell-off would be disruptive in the debt markets in the short run. It would cause, for example, an increase in interest rates." Interesting. I find both of those arguments to be a little weak.

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