Danish Pension Fund Dumps Its US Treasuries

A decision that might normally attract little attention is drawing notice amid heightened tensions between Denmark and the United States. A Danish pension fund is planning to sell all of its roughly $100 million in U.S. Treasury holdings by the end of the month, citing concerns over what it describes as weak U.S. government finances, according to Reuters.

AkademikerPension, which manages retirement savings for Danish academics, says the decision is based on long-term financial considerations. The move comes as President Trump has intensified his rhetoric about taking control of Greenland, a territory of Denmark.

“The U.S. is basically not a good credit, and over the long term U.S. government finances are not sustainable,” Anders Schelde, AkademikerPension’s chief investment officer, told Bloomberg. The fund says the decision is not directly related to the dispute over Greenland. Schelde pointed instead to large federal budget deficits and rising debt-servicing costs, which he said prompted the fund to reassess how it manages liquidity and risk.

Some prominent investors have warned that AkademikerPension’s action may reflect a broader trend. Ray Dalio, founder of Bridgewater Associates, told CNBC that if countries begin to see the United States as a less reliable economic partner, they could start reducing their exposure to U.S. assets, including government debt.

The decision follows last year’s move by Moody’s to downgrade the U.S. sovereign credit rating to Aa1, citing persistent deficits and higher interest expenses as major concerns.

Original Source