How the Savings Glut Still Sways U.S. Bonds
- Taiwan’s demand for dollar assets has alerted its regulators
- Will be ‘long time’ before China can mop up savings: Pantheon
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The “global saving glut” that former Federal Reserve Chairman Ben Bernanke famously blamed for depressing U.S. interest rates more than a decade ago hasn’t gone away. And if the appetite of Taiwanese investors is any guide, it’s here to stay.
While its economy is smaller than that of New Jersey, Taiwan’s holdings of U.S. financial assets amount to the equivalent of all of the state and local government debt from New Jersey, California and Michigan combined. Put another way, Taiwan’s dollar portfolio -- $616 billion of stocks, bonds and credit in April -- exceeded all U.S. long-term securities held by Latin America.