It is final. US benefits the most from the credit crisis!

How so? Let's look at the US Treasuries 30-Year bond yield. Thanks to "flight-to-quality" it yields 2.5605%.



That means investors are willing to lend to the US government for the next 30 years at 2.5605% per annum. Sounds weird? One school of thought argued that the market is pricing in long period of deflation, meaning in real term the 2.5605% yield is relatively high as the deflationary pressure is taking into account. Well, that make sense IF the US dollar is strong against all major currencies.

But that is not the case. It is because we have Helicopter Ben. Ben Bernanke through his last policy statement has indicated that he would do whatever it takes to stimulate the US economy. To me, it means the printing press is going to operate 24 hours a day and seven days a week for the foreseeable future. And the market swiftly reacted. The weighted dollar index (DXY) is now trading below 80, at 79.467.



Anyhow, it is incredible to see people keep financing the US government given the low yield, at the same time the greenback seems to resume its falling trend. I think the writing is already on the wall: US benefits the most from this credit crisis, again!