Algeria invested $50 BLN in U.S Bonds

Algerian funds that have been invested in the United States in the form of treasury bonds are estimated to $50 b, with a high level of standard safety of 99.42%, based on five main reasons including the indicator of solvency of bonds, which is the index the most solvent since its creation in the nineties for a state or company, and for being the best barometer to measure the inability of any state for payment, an economist and financial analyst in the Swedish stock market Noureddine Leghlil told Echorouk.

“The U.S bonds for five years are at a level of 54.32 bases points versus 57.45 basis points for the german bonds, against 103 basis points for the French bonds, and this means that in order to secure the amount of $ 10 million of US treasury bonds, you must pay $54.320, versus $57.450 to secure the same amount of German bonds and $103.000 to secure the French bonds, which means that the American financial products are safer than the German and French counterpart”, he explained.

“The second indicator on the interest rate of the US bonds is in good levels in the medium term, until September 2012, regarding the case of the Green Paper, despite the pessimistic voices about its efficiency, the U.S. dollar maintained its value at levels ranging between 1.38 and $1.43 for the euro, and 79 and 84 Japanese yen for $1, and 1.58 to 1.63 pounds for $1, and the levels of Americanization of the U.S public debt as well, as the share of foreign investments in the US market falls from 52.2% in 2007 to 48.1% in 2009”, he added.

According to statistics of the Federal Reserve, 51.48 of the American debts are controlled by American investors, and finally the good financial health of American companies, which revealed on good results during the last three months.

“Although the quality of indicators related to investment in the U.S. treasury bonds, compared with their counterparts in the world, as previously mentioned, but the government and Bank of Algeria deal with the issue of investing in American bonds as a state secret. It is a misplaced position, especially by governor of the Bank of Algeria entrusted with the responsibility of conducting Algeria’s foreign exchange reserves under the law. Algerians knew about the value of Algeria’s investments in the US bonds for the first time in May 2006, when Gene Sperling, adviser to the former U.S. President Bill Clinton, who addressed the students of Boston University saying: “I do not understand how a country such as Algeria will pay half its gross domestic production to buy bonds of the U.S treasury?”, and when we know that Algeria’s GDP was at a limit of $100 b in 2006, this means that the value of bonds bought by Algeria on that date were at the limit of $50 b. what is strange is that the Algerian citizen knew his country’s investments from a U.S official and not from the Bank of Algeria”.

The American sovereign debt exceeds the threshold allowed by Congress $14.294 b, reaching for the first time the level of $14.400 b, and if no review threshold before August 2, the U.S Treasury would be barred from obtaining new loans from the American financial markets to finance the U.S. deficit, and this means that the American federal government will be unable for payment a situation described by the President Barack Obama as the end of the world.