What are some realistic alternatives to US markets here? Selling is one thing, the question is what to buy instead? I mean, everyone starting to buy european instead would be great for stock prices, but it wouldn't make the underlying assets more valuable, right?
If you divest US bonds, you would probably put them into bonds from other nations (and corporate bonds from non-US companies), easiest thing is to try to find a index to track; Vanguard's BNDX tracks the Bloomberg Global Aggregate ex-USD Float Adjusted RIC Capped Index (Hedged).
In a mark to market world, the value of a bond is its acquisition cost, so buying bonds enough to raise prices increases their value, but not their coupons or their face value. It's hard to make sense of the value of a sequence of payments, it's reasonable to consider the present value and the market price is an easily justified present value for a bond.
Selling bonds and buying stocks is a different thing altogether. Selling US stocks and buying EU stocks wouldn't change the value of the underlying assets, however, having an increased stock price does have benefits for the company when issuing new shares or bonds.
Large institutions have been moving in this direction for about a year.
I just put together a fairly more stable and diversified portfolio that is effectively only about 15% in the US. It involves some short-term private equity, lots of commodities, European cyclicals and financials, some small Deep value, energy and climate change infrastructure is on solid ground and being well funded around most of the world… they really are plenty of bright spots and lots of good advice out there, even from public letters from places like Van Eck, Piko, GMO funds, and others.
There are a number of very important categories to avoid, like convertibles, but overall it’s quite possible if you have a little bit of acumen with investing.
Eurobonds. It may actually happen if this continues. But given the speed of the usual EU decision process I would not be surprised if it takes them longer than the current US administration to finally agree on the various terms. And that's good for Europe in multiple ways.
In the meantime: German, Dutch, UK (technically not EU), Swiss, Nordic paper is also a good substitute and regardless all you really want to do here is not to hold an asset that may well become a liability so in that sense almost anything is better.
Eurozone has a looming debt crisis. ECB is actively capping the yields for countries bonds from Spain and Portugal which are showing stress signals. This will not end well for ECB this time around if they end up something like 2012.
Stock market is different from bond market, but bond market everywhere is showing stress signal. Just look at Japan. But yeah, eventually it will spill in stocks.
That is fair. Sorry, colored by the fact that I actually live in Switzerland and so investing them in Swiss treasuries is like keeping the cash for me.
That's an easy mistake to make. When you're looking internationally you always have to take the rates into account. For you it doesn't matter, but a lot of parties are investing in Swiss treasuries exactly because it is like keeping CHF. which tends to do well relative to their own. The long term USD vs CHF rate works out strongly in favor of holding CHF.
> What are some realistic alternatives to US markets here
There is nothing particularly interesting or sexy about US treasuries. You could replace a holding of $8bn to $80bn with equivalent or better rated bonds in a half hour or so.
Replacing that sort of allocation of stocks or commodities would be way harder as returns on those assets are not as simple as "pays a 4% coupon each year" - finding an equivalent of Apple or Nvidia is not a trivial task.
Sovereign debt of a more politically stable nation state or other monetary union, if you are investing at these levels. If you're an individual, you have more options, although there will be fierce debate about the risk profile (as US Treasuries were historically considered to be risk free).
The disciple went to his master and said "Master, I am considering stopping doing a thing and starting to do a different thing. But I am not certain what the new thing is that I should be doing".
The master turned to the disciple and said: "A better thing"
The disciple was enlightened.
EDIT: Oh damn it. The entirety of the comment was "Sovereign debt of a more politically stable nation state or other monetary union" at the time I replied. Ah well.
You've answered a different question than the one I asked. I think the US will continue to pay its debts, under this president and the one who replaces him in three years.
The point is that it doesn't matter, the US is toxic for the next foreseeable twenty years, and for Europe as a whole, a threat and an enemy. We'd be stupid to keep funding your economy, no matter how much money it makes back. Enemies are to be taken down.
>under this president and the one who replaces him in three years.
The levels of optimism in this sentence are off the charts. The US's political systems are so weak, fragile and compromised that you don't even know if you're going to hold proper midterms or if you're going to get a civil war, the current president is threatening the FED, but sure, debts are going to be paid when it's ran by the dude that managed to bankrupt casinos.
The US will pay its debts in USD and the German government will pay its debts in Euros. If you think the euros to dollar exchange rate will be better in the future, it can easily dwarf the difference in interest rate between the bonds.
How does that practically work out in selecting bond investments though? Betting on receiving euro coupon payments would look like buying BNDX over BND. But in the last year, while the Euro appreciated ~12% over the Dollar, $BND is up ~3% while BNDX is down ~1%.
International Bond ETFs are normally dollar-hedged.
There are some unhedged ones that are in the local currencies and better at tracking foreign exchange rates. e.g. BWX is an unhedged international treasury fund.
He can mull all he wants and half the time, that mulling turns into reality.
In practice, he has the authority to do anything he wants. Who is going to stop him? You? His pets in Congress? JPow's private hit squad? Clarence Thomas?
The first rule of neo-America is that you're playing the Chairman's Game[1], and there are no more rules. Its counterparties should bargain with it accordingly.
[2] The Chairman's Game is a game invented in a university. Some say it was invented at Stanford, while others say it was invented at MIT. It was inspired by a formerly prominent, but now somewhat disgraced Chinese politician that was famous for coming up with a lot of interesting new rules for his subjects to follow, and enforcing those rules very harshly, without necessarily informing those subjects what those rules were. It's a little bit like Uno, a little bit like Crazy Eights, and the only thing that I can tell you about it is that there are times, when playing this game, when it is not a good idea to speak.
What a ridiculous statement given everything we've seen in the last year. The president doesn't have the authority to withhold funding to the states, or to deploy the national guard (absent an emergency), or to use the Justice Department as his personal law firm, and yet... All he needs to do is have the appropriate person fail to do their job and nothing gets paid.
The risk for credit default is very close to zero, but the risk for renegotiated contract terms is not zero. That's what the whole Mar-a-Lago Accords was about. It is a strategy that describes in detail how that would be executed. The likeliness for which is up for debate, of course, but it's certainly not a risk free asset.
Add to that the rampant debt increase over many decades and zero political will to rectify the situation, which is why the rate of return is so much higher than in more politically stable countries such as for example Switzerland, Germany or Sweden.
1. Trump has constantly stated how he believes the US has spent money and lives doing things for the rest of the world. He just did it with Canada this week saying "Canada exists because of the US'.
2. The majority of his followers have some level of cult like adoration for him and therefore he isn't worried about losing support for radical actions.
3. Republican voters have been told to not trust the experts, news, or the opposing political party which eliminates all outside sources of information. This allows them to make claims about our debt or why we shouldn't pay it and many of these voters won't get opposing views.
4. Trump wants a massive increase in spending for the military and has cut taxes. While at the same time Republicans ran on the high debt. Not paying it by claiming it's invalid solves that.
> The CFR Sovereign Risk Tracker can be used to gauge the vulnerability of emerging markets to default on external debt.
Sort of definitionally, nothing in that list is going to be more politically stable than the US.
In the second link, the author gives slightly lower country risk premiums (0% vs 0.2%) to Australia, Canada, Denmark, Germany, Liechtenstein, Luxembourg, Netherlands, New Zealand, Norway, Singapore, Sweden, and Switzerland. Setting aside the practicality of these recommendations (how much debt does Liechtenstein issue? or Germany, for that matter?): in a world where the US is unstable, it's hard to imagine Canada being risk-free.
What makes you say "certainly," especially in the hypothetical scenario where the US is unstable? Canada has a relatively much shorter history as an independent nation. Canada heavily benefits from its southern neighbor, and has a host of domestic economic issues (low wages, high housing prices; whatever the farmers are on about) that could cause instability as well. I think Canada is reasonably stable, I just quibble with "certainly" and "more" politically stable as compared with the US.
Your "long history as a nation" mostly means you have a flawed constitution, no counter powers, a broken political system and absolutely _zero_ attempts to fix it.
There's a reason proper countries have had 5+ constitutions and keep changing them.
Canada will not invade allies and will adhere to the rule of law. Their forward looking economics are more favorable as they strengthen ties with China and Europe. By decoupling from the US, their economic risk declines, and their sovereign debt risk is downstream of that.
You are arguing as if nothing material in the US has changed while at the same time arguing “be more polite towards my ignorance|avoidance of the situation.” It comes across as arguing in bad faith.
The US can no longer be trusted based on the actions of this administration. Other countries are pragmatically and reasonably adjusting accordingly, very publicly. There are other options besides the US from an economic, trade, investment, and defense ally perspective. These are facts. Whether you believe them is a choice.
...what? That literally makes no sense. "Europe" is not a country. "Europe" does not dream of being an empire, because it has no cohesive governing body or even identity as a whole - maybe France or UK dream of being empires but collectively? Does Slovakia or Portugal dream of being empires?
That is such a naively simplistic view of how the world works it reads like it's straight from a Daily Mail or Fox News headline, which always say "Europe does X" - like, who is Europe? Are they in the room with us now?
"Europe is learning" should say - (some) European states are learning, and they are learning that you cannot negotiate with convicted criminals and fascists - they will betray you on a whim because they do not answer to anyone, not even themselves.
Again, is this Europe in the room with us? Or have you eaten too much American propaganda that treats "Europe" as if it was one country? Maybe it's time to lie down my dude.
No I just think this is so obvious by reading literally any news website for 5 minutes that I can only conclude that someone saying it's "hypothetical" is either acting maliciously or they are actually ignorant of what's going on.
On the first page, I see 9 countries which it claims have a default risk of 50% or higher in the next 5 years. Which means a probability of at least 1-0.5^9=0.998 that at least one of them will default.
That's a crazily high confidence prediction. What is their track record? What did they predict 5 years ago and how did those predictions bear out?
To be clear, those countries are: Argentina, Belarus, Ghana, Pakistan, Russia, Sri Lanka, Tunisia, Ukraine, and Venezuela. It would not be shocking if any of those countries defaulted. Also: your math assumes events are independent, but at least the Belarus/Russia/Ukraine events are probably not independent.
Edit: whoops, CFR only gives Russia a 9/10 score, not the full 10/10 score of 50% default probability.
You can’t invest in EU sovereign debt though, only the constituent countries.
The problem is that US treasuries have a bunch of features that can’t be replicated because of the size of the US economy. The only choice that comes close is China whose bonds are too illiberal to trade the same (and China has no interest in liberalizing them).
It’s not just that the market isn’t deep enough. The current incarnation of EU bonds are not secured the same way typical sovereign bonds are. And they sort of can’t be without the member states ceding more sovereignty.
We’ll see if the EU member countries can approve a framework for bonds that are closer to a treasury in its guarantees, I’m skeptical but it could happen, but they don’t exist right now.
As they say: under enough pressure everything becomes a liquid. The current situation is in many ways unprecedented and I think that Trump may well be the antagonist that forces the EU to band together more effectively.
So the EU should issue more volume and establish a strategy to start rotating from US debt to EU debt. No one is calling for dumping $8T of treasuries on the market overnight; it's entirely reasonable to start issuing Euro debt and communicating the expectation to start selling down US treasuries to European entities that hold them.
Yes, they should. The interesting bit here is that the USA has been an endless sink for funds simply because they have been spending way above their means, and that this worked in large part because there was trust. Breaking that trust is super risky from a US point of view. Europe has been more conservative in their spending and as a result needs a place to park their excesses, because there are not enough ways to spend those internally. I think that this is a luxury problem to have, but at the same time I realize that financing the USA any further is something that is not responsible from an EU perspective.
It’s also part of the reserve currency dynamics. It’s not clear how the modern bond market will work in a post dollar world, we frankly don’t have an example.
It’s entirely possible that the EU can overcome the political struggles that a true EU bond brings about (I’d love to see how a bond would work that both the Hungarian and Danish and French and Greek governments would back long term) but it seems just as likely that each country will hold bonds in lots of countries, probably in some similar relationship to their trade imbalance.
But this is not some unmitigated win for the EU, there is just as likely to be really inefficient and riskier outcomes for everybody as there is some karmic punishment for the States for allowing Trump to run amok.
Indeed, this is both complex and risky, but it is fairly clear by now that we need to do something concrete rather than just yak about it. Hungary is indeed a problem (and has been for a long time) but I'm actually impressed with the restraint shown by the bloc to let Hungarians deal with this on their own terms as long as it does not stop the EU from handling foreign policy.
The trade imbalance angle is exactly the one that I think they will pursue because that is the one that can be made to work numerically, but great care should be taken to ensure that Germany does not end up with a disproportional amount of power. In a way the EU being fragmented but forced to work together is the best recipe for a fair outcome though the larger entities will probably always have some minor advantage in such constructs.
Macron says €300 billion in European savings flown to the US every year will be invested in Europe from now on. All 27 EU states agreed to establish the S&I Union, a step toward the full Capital Market Union - https://old.reddit.com/r/europe/comments/1qjtvtl/macron_says... - January 22nd, 2026
In the context of sovereign debt, yes. I don't even feel that that the US is stable enough. Of course, everyone sees the world through their own eyes, but in my world, the EU has been going down post-covid in terms of e.g. purchasing power, industrial base, business opportunities for the small/medium business. The defense industry is strong, because it is currently needed and funded, but how long can that be sustained?
Not "worth to invest in," just the higher criteria GP asked for: "a more politically stable nation state." It has to be strictly more stable than the US, not just investable.
I mean there is a second almost if not more critical requirement which is has a big enough and liquid enough debt market to function like US treasuries.
> Also I don't see that EU as a whole is on a downward trajectory
That's an extremely contrarian take that you can't justify with EU defense did good for once in it's life. Maybe we'll see something from the EU but remember the USA and EU GDP were basically identical 10 years ago now the US is 50% bigger.
Seriously in 2008 the EU had a bigger GDP and now is a fraction of the USA and member nations have done basically nothing to fix the core issues that left them behind.
> US on the other hand - who wants to invest in or trade with them when they treat the rest of the world (including close friends) as shit.
Sadly it doesn't really matter about a "want" it's a need at this point unless people are going to cut off their arm and collapse their own economies they don't really get a choice.
Fair, but a bit slower growth than US is not a downward trajectory. Also there is currency effects involved.
Isn't US injecting a lot of loaned money into the economy in a rate that might not be sustainable long term? Their debt-to-GDP ratio is way higher than EUs?
It depends on the goal. People buy bonds to play a certain role in their overall investment strategy. China and India have been quietly selling American bonds and focusing on gold / silver / etc. BRICS has also talked for a while about forming their own shared virtual currency but that is further away. You can buy other assets as a store of value too.
Same thing that happened to Spain after the New World gold and silver came in, Inflation (limited local supply to spend on and so prices raise) and debt payments, ultimately leaving Spain poor.
At first I was leaning toward FGLD but didn't consider that current admin would blow up everything US, there are European alternatives to FGLD that OP might want to investigate that have physical metal reserves (there are many alternatives that represent various tiers of involvement in mining versus just holding precious metals, I'm speculating OP does not want to possess precious metals themselves).
Well, if we're talking about the value of the underlying assets - then I imagine you have all your savings in gold because the PE ratios in the US stock market are already absolutely insane.
If you're trying to escape an expected upcoming crash you don't necessarily need to look for growth but instead stability. Precious metals are always popular but simply shifting a portion of your money into an index fund of a different stock exchange should help minimize your exposure to any catastrophic loss.
i've wondered this myself. I thought that everyone was selling bonds and just buying equities, gold and bitcoin. isn't that only game plan? bonds aren't investible anymore for anything more than 5 year time horizon.
Also consider the tools and materials available today. I don't know much about Michelangelo, but I imagine people's opportunity for sheer iteration (due to availability of qualitys pens, pappers, ink etc) is magnitudes higher (and cheaper) today.
Fully agreed. The Talk pages are a very interesting read these days. I things continue down this path I think Wikipedia will be a lot less relevant in the coming years, at least for current events and things related to the on-going culture war.
You are wrong on several points. It is policy not to shoot a car like that even if it is driving at the officer (which this vehicle was not doing and can clearly be seen from multiple camera angles). Shooting the driver will not stop the car, it will just kill the driver.
And in this case, shooting her made the situation much more dangerous. It caused her dead foot to stomp the gas pedal, dangerously accelerating the car uncontrollably until it crashed on the side of the road.
I see Google's AI and top results all give this answer, but "MIGA" most certainly does not refer to India in this or most contexts, but to Israel. It is a criticism of Trump's pro-Israel actions, and presumably Google recognizes its anti-semitic usage and so will not suggest that as an answer unprompted.
I'm pointing this out specifically because I'm surprised to see that Google and also DuckDuckGo both suppress the true definition if you don't already know it.
I'm an enterprise user and I find Windows 11 a complete disaster. They've managed to make something as trivial as right-clicking a slow operation.
I used to be a pretty happy Windows camper (I even got through Me without much complaint), but I'm so glad I moved to Linux and KDE for my private desktops before 11 hit.
I will pick a web app over a proprietary "native" app every time. That way, it can stay in a sandbox where it belongs. Discord, Zoom, Meet, Trello, YouTube, and various others, all stay in sandboxed browser tabs.
I have several web apps installed over the native alternatives. Discord is the most prominent one; I've found their native app has been getting shittier by the day over recent months, while the web app remains as snappy as any Safari page. Plus I can run an adblocker and other extensions in the web app which improve the experience.
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