Finally, whatever you want to say about the inevitability of the decline of American hegemony, the U.S. dollar and U.S. Treasury bonds still play a unique role in the global economy, which probably allows us to take on more debt than other countries without crippling our economy
through currency depreciation and high interest rates.
Not exact matches
Because most wealthy Chinese seem to think about RMB in terms of USD or Hong Kong dollars, it is the fear that any
depreciation of the RMB against those two
currencies (the Hong Kong dollar is pegged to the USD
through a modified
currency board) greater than the couple of percentage points interest rate differential would yield less than equivalent USD or Hong Kong dollar bonds.
But it is comforting to know that the local
currency exposure should add a long - term incremental return, rather than eat away at the attractive real yield
through depreciation.