Do you think the Chinese government should be held accountable for preventing media coverage in Tibet (not to mention human-rights violations)?

Jingoistic opinions from any country is really stupid.

The thing about a trillion is that it is very hard to do mattress artbtrage. If you have $10 million, you aren’t going to have negative interest rates, since you’d go to the bank, withdraw all your money and put into your mattress. You can’t do this with a trillion, and it may well be that taking a 10-20% loss is the best that you can do.

One problem with diversifying out of the dollar, is where do you go? If you have dollars, then you can buy US treasuries, whereas there isn’t an equivalent liquid store of value for the euro.

JB: Brad, I am surprised that the US Dollar demand by these enormous funds hasn’t done more to buoy its valuation

They are exchanging dollar denominated debt for other dollar denominated debt which means that there is no change in the demand.

What’s happened over the last few months is your classic bank run, and the only reason you don’t seem panicking people standing in line like you do in the movies is that everything is done over the internet now.

Off-topic but since you are aware of my views on the Tibet issue, do you think the US news media should be held accountable for disinformation and libel.

Western Media Fabrications regarding the Tibet Riots – Fake Videotape used by CNN http://www.globalresearch.ca/index.php?context=va&aid=8697

On the day of the Lhasa Riots (March 14, 2008), there is evidence of media fabrication by CNN. The videotape presented by CNN in its News Report on the 14th of March (1.00pm EST) was manipulated.

Brad, I am surprised that the US Dollar demand by these enormous funds hasn’t done more to buoy its valuation. I think this means that SWFs are not only a macroeconomic mover but also subject to macroeconomic moves. A casino dealer if you will. I think this one has had a recent run of bad hands.

what i do know is that someone is still buying a lot treasuries and agencies, and that the "diversification" process hasn’t really started for a lot of big players.

The trouble is that everything else is based on the value of T-bills on the theory (which seems correct) that if T-bills go belly up, so will everything else.

JB: They have to be losing big by being in dollar denominated bills. Why not hold reserves in Australia, Switzerland, etc.

Because the Australian and Swiss economies are just not big enough to hold all these reserves.

The Euro is the only thing that could possibly compete against the dollar as a reserve currency, and switching a trillion dollars is not something you can do easily. One problem is that to be a seller you have to have a buyer, and there aren’t that many people out there wanting to buy another trillion dollars.

It’s again the foundational problem. Even if you think that the US economy is run badly and the dollar should tumble, the value of everything else is built on top of the dollar. So if there is a total collapse of the dollar, it’s going to take everything else with it.

Do you think that Sovereign Wealth Funds participate in the hybrid debt / equity raisings by Citi, Merrill, etc? I’ve heard Bill Gross (the titan of fixed income) comment that T-bills are the most overvalued fixed income instrument on the market. I think petrodollars are ready to dump t-bills big time if a low risk, high yield investment becomes apparent in the market. They have to be losing big by being in dollar denominated bills. Why not hold reserves in Australia, Switzerland, etc. Inflation concerns have to be equally alarming to these big fund managers. I think the Petrodollars are also partially responsible for driving ABX indices through the floor. Agree?

For more than a century ideological extremists [sic] at either end of the political spectrum have seized upon well-publicised incidents such as my encounter with Castro, to attack the Rockefeller family for the inordinate influence they claim we wield over American political and over economic institutions. Some even believe we are part of a secret cabal working against the best interests of the United States, characterizing my family and me as "internationalists" and of conspiring with others around the world to build a new global political and economic world order? one world, if you will. If that’s the charge, I stand guilty, and I am proud of it’