So the other day I read somewhere that hedge funds on the cayman islands sold 400 billion dollar worth of U.S. government bonds of which 100 billion in the last two months alone(mind that Cayman islands have only 60k residents so that would mean 8 million per resident lmao).
But ofcourse the real reason is that cayman islands have about 11k hedge funds that own about 80% of hedge fund capital that is estimated to be about 3400 billion dollars. Cayman islands is known for their very mild fiscal regime but it also provides hedge funds the opportunity to anonomously speculate. Ofcourse one of the most recent examples is when they tried to short sell Gamestonk which angried an army of small reddit investors.
As expected, this however in no way discouraged hedge funds to massively short sell the biggest fund in the world: the U.S. with it’s state deficit of 28k billion dollars. This means that hedge funds are now willing to risk a confrontation with the Federal Reserve who is able to print money and buy state bonds in unlimited supply.
None the less hedge funds have accomplished to lower the share price of government bonds. The efficiency on 10 year bonds has increased from 0,9% beginning this year to 1,6% now. Hedge funds probably think those bonds will lower in value with Biden going on a spending spree. They anticipate this will lead to inflation and an increase in interest rates.
The hedge funds are taking a huge gamble here but by short selling this massively they undermine the solvency of the U.S. itself. It’s a sign on the wall that the financial power of the fast money community is growing each day. There is no stopping these vultures.
But ofcourse the real reason is that cayman islands have about 11k hedge funds that own about 80% of hedge fund capital that is estimated to be about 3400 billion dollars. Cayman islands is known for their very mild fiscal regime but it also provides hedge funds the opportunity to anonomously speculate. Ofcourse one of the most recent examples is when they tried to short sell Gamestonk which angried an army of small reddit investors.
As expected, this however in no way discouraged hedge funds to massively short sell the biggest fund in the world: the U.S. with it’s state deficit of 28k billion dollars. This means that hedge funds are now willing to risk a confrontation with the Federal Reserve who is able to print money and buy state bonds in unlimited supply.
None the less hedge funds have accomplished to lower the share price of government bonds. The efficiency on 10 year bonds has increased from 0,9% beginning this year to 1,6% now. Hedge funds probably think those bonds will lower in value with Biden going on a spending spree. They anticipate this will lead to inflation and an increase in interest rates.
The hedge funds are taking a huge gamble here but by short selling this massively they undermine the solvency of the U.S. itself. It’s a sign on the wall that the financial power of the fast money community is growing each day. There is no stopping these vultures.
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