Jordan Weissmann over at the Atlantic blog sums up what makes US investing (still) so attractive, and where the current chase to invest is headed.

Money quote:

Today, mortgage investments are toxic. European debt is radioactive. Not only has the variety of safe haven assets been whittled down, but the their total value has shrunk. The United States has pumped out more Treasuries, but many are bought up by the Federal Reserve, and the overall increase has not been large enough to make up for the disappearance of other assets. Investors have turned to other safe investments, such gold and the Japanese yen, but there’s no real replacement for assets denominated in the major reserve currencies. That consistently rising blue line on the chart is the amount of euro and dollar reserves held by emerging market economies. Right now, there’s too much money chasing too few assets.

Advertisements