Steve Roach, Chairman of Morgan Stanley Asia, thinks the treasuries bubble may go on for a while; There is not much difference between Japan and the US.
For Japan, it had equity and property market twin bubbles plus bad monetary policy; for the US, it also had credit and property market twin bubbles coupled with bad monetary policy. If there is any sign of recovery in 2009, it will be ‘anemic’. (source: Bloomberg)
I am not sure why Roach says monetary policy in the US was bad. Is he referring to Greenspan who kept the rates too low for too long? Or is he referring to the aggressive policies by Bernanke now? The case of Benanke’s policy measures is justified, in my view.