Will Asians Dump Their Treasuries? Not Too Likely

As Korea, Japan and other Asian economies have plunged deeper into crisis in recent months, fears have spread of the doomsday scenario: Would the Asians begin to sell tens, perhaps hundreds, of billions of dollars in U.S. government securities to pay off their mounting debts? A tidal wave of selling would knock down the price of Treasuries, driving up interest rates and edging the American economy toward recession. In the ensuing panic, stock prices could be hammered, prompting a market crash.

However nightmarish and improbable, this Wall Street bugaboo has been popping up with increasing frequency as the Asian crisis drags...

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