Instead, Hasenstab is focusing on countries that have lower debt, such as Australia.
“The country has low indebtedness, it is growing strong, it is raising rates, (and) it has exactly what China needs. So there is a huge external demand for Australia,” Hasenstab explained.
He said he believed the country is well poised for the next five to 10 years because of its links with China, as well as its lack of leverage.
The best way to play the Australian debt market is to buy Aussie dollar-denominated bonds with short duration interest rates or local market rates, suggested Hasenstab.
Besides Australia, he also favors Norway and Poland.
“Norway… is a country with an oil wealth fund that could pay down their government debt market four times over,” Hasenstab explained.
While in Poland, its debt to GDP stands at around 40 percent when using the same accounting methods used in France, he noted.
This makes Polish debt a much more attractive bet than U.S. paper, as the latter’s debt-to-GDP ratio currently stands at nearly 95 percent.
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