No. of Recommendations: 12
Are you in a state where you are forced to reassess the safety and soundness of US Treasuries?Sure.
Bear in mind that my main motivation in selling them is that I no longer desire to be part of the US economic sphere at all, in the same way that I would not want to be part of Russia's. From that it follows that I don't and won't need any US dollars on short notice to make any US investments on future market dips, which is the main reason anyone would hold them: a placeholder for future use. In that sense, the financial risks of holding them are secondary to my reasons.
I don't see many present risks for US residents holding US T-bills, but for those of us outside the country it's more than a little bit different. I conclude the financial risks are now meaningful--meaningful enough to want to take actions to avoid them.
From a post of mind at the (now digressing) thread at the Berkshire board:
"...the [financial] risks are getting pretty plain. You may or may not be aware of moves to curtail inbound investment via taxation of portfolio flows, and (separately) talk of forcible conversion of US debt to non-redeemable perpetuals in some circumstances. Plus many things not already on the policy plate but all too plausible....For non Americans, is there a 1% chance of (say) a huge withholding tax on T-bill redemptions that are not rolled over, or withdrawals from US brokerage accounts, or punishing withholding tax on sales? Would a US brokerage one day be asked/forced to apply some rules that might not be lawful under US law? Note that there is already a rule that if a non-US-person sells shares of a listed LLP, the entire sale proceeds (not the profit) are subject to 10% withholding tax which is (in my case) non recoverable. Buy $100 worth of Sunoco, sell at $105, lose $5.50."It's not just paranoia. Here's someone else's post, which links to and discusses current policy proposal to (among other things) force non-US debt holders to swap for perpetual bonds, which is a forced debt restructuring.
https://www.shrewdm.com/MB?pid=638518736Jim
