re: Danish pension fund to sell $100 million U.S. Treasuries

quote:

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Doesn’t Europe hold something like 50% of the outstanding foreign held debt? If they sell, and stop buying, prices fixing to go up bigly.

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Selling Treasuries would equate to selling dollars and buying euros, pounds, etc. As a result, the euro and assorted currencies would strengthen, making European exports more expensive. European economies, already struggling with growth, would get absolutely slaughtered, driving them into recession.

Then there's the issue of needing to park their money somewhere else with either lower returns (Germany), and/or higher risk (Italy, France). So doing would result in higher spreads for weaker European debt instruments stressing those individual economies. Adding further fuel to the fire, European banks would lose their best collateral, and so they'd have to tighten credit.

As US bond rates rose, they'd attract private EU investment. So European money would flow here anyway.

Aside from those small details, you make an interesting point.