After getting some positive reaffirmation from the Japanese of their love for our debt, Russia’s Finance Minister at the G8 said there was “no alternative” to the US$ as a reserve currency and that the US$ was “in good shape”. Russia has the 3rd largest reserves and the comment comes on the heels of news last week that Russia was going to focus on buying IMF debt and less US debt. Geithner has his salesman cap on and is doing his best to ease foreign concern with the monetary and fiscal policies of the US. The US$ is also being helped out vs the Euro after a German official expressed concerns with businesses access to credit. The G8 also discussed European bank stress tests and central bank plans to exit their unconventional policies at the right time. Global stocks are selling off more on a case of acrophobia after huge runs rather than any big news event but stocks got tired Friday and didn’t respond to the drop in yields.
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