, 5 tweets, 3 min read Read on Twitter
Stunning chart. German savers, foreign private investors and (to a degree) reserve managers have all been forced into riskier investments b/c of the shrinking supply of the euro area's safest asset.

(h/t @adam_tooze)
@adam_tooze German mini-stimulus under discussion is too small to change the basic dynamics in the bund market. Would mostly be a swing from a surplus to balance -- no big change in net bund supply

@adam_tooze Looks like reserve managers hold an estimated EUR 600b in bunds. That falls far short of the world's euro reserve holdings. The world's reserve managers really have no choice but to hold French (and now Spanish?) bonds -- or take the ECB's negative deposit rate
@adam_tooze In a world without Germany's debt brake, I would think that Germany - as the issuer of the euro area's reserve asset - should aim to keep bund supply stable as share of its GDP.

It would still be growing less rapidly that global demand for EUR reserves (in all probability)
@adam_tooze As I have said before, rather than complaining about German trade policy, the Trump administration really should be complaining about German fiscal policy.

Shrinking bund/ euro safe asset supply is effectively forcing global investors into the dollar ...
Missing some Tweet in this thread?
You can try to force a refresh.

Like this thread? Get email updates or save it to PDF!

Subscribe to Brad Setser
Profile picture

Get real-time email alerts when new unrolls are available from this author!

This content may be removed anytime!

Twitter may remove this content at anytime, convert it as a PDF, save and print for later use!

Try unrolling a thread yourself!

how to unroll video

1) Follow Thread Reader App on Twitter so you can easily mention us!

2) Go to a Twitter thread (series of Tweets by the same owner) and mention us with a keyword "unroll" @threadreaderapp unroll

You can practice here first or read more on our help page!

Follow Us on Twitter!

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just three indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3.00/month or $30.00/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!