TIPS lead CDS Prices, says Howard Simmons

May 23, 2011

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  • Credit Default Swaps (insurance contracts against default) are a meaningless concept for the reserve currency, with the real risk being creditors are paid back in worthless dollars.
  • Weimar Republic paid back German War Reparations with worthless currency, destroying their economy in the process.
  • TIPS Breakevens lead CDS Prices by 39 days
  • Despite this, CDS on US sovereign debt still remains near highs.

SFO Mag

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