They can't run out of U.S. exposure. They have Treasuries, cash, the whole yield curve, corporate bonds that they can invest in. They can even invest in paintings.
More Quotes from Stephen Jen:
The Europeans don't care as much about the yuan because the issue is trade and their deficits with the Chinese are much smaller than the U.S.'s.Stephen Jen
With the strong labor report, strong retail sales, and the strong inflation report, market expectations of a sustainable U.S. recovery have increased.
Stephen Jen
(After this week's Fed speakers) the bottom line is we will most likely know what the Fed will do before September 20. My ... hypothesis is the Fed will maintain its tightening path, uninterrupted.
Stephen Jen
It's all a very incremental process. They want to rebalance the capital inflows and outflows. Without a balance in flows, you wouldn't want to let the exchange rate find its own place.
Stephen Jen
I strongly doubt that this will be the beginning of wholesale diversification from U.S. dollars.
Stephen Jen
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