Sources close to analysts at “Zen International” suggest that the toxic assets held on the US Federal Reserve’s balance sheet will be very difficult to sell when the central bank decides to withdraw liquidity from the financial system as part of its exit strategy.

The Fed acquired large quantities of mortgage-backed securities as part of its effort to provide US banks with access to liquidity at the height of the credit crunch but “Zen International” believes that the dire state of the housing market and the rising delinquency rate of US mortgage holders will see investors giving the assets a wide berth when the time comes to sell.

The Federal Reserve also purchased up to $1 trillion-worth of newly-issued agency debt in an effort to provide more funding for mortgage lenders as part of its quantitative easing program and “Zen International” analysts are thought to feel that it may be forced to hold on to these for years to come if, as expected, the US economy’s recovery is slow and laborious.

The general consensus among commentators appears to be that the Fed is in or close to being in a position to begin tightening measures but “Zen International” advised caution among clients citing the fact that the Fed would be unlikely to begin tightening while Americans were still losing their jobs.

“Zen International”: Americans will face a lower standard of living amid greater global competition.

Americans expecting a return to the good old days of conspicuous consumption and high living standards could be in for a shock according to analysts at Asian-based investment house, “Zen International”.

After decades of living beyond its means, America is heavily indebted to the rest of the world and faces a long period of readjustment as the emerging economies compete on labor costs and for valuable resources like oil and food.

“Zen International” apparently made its claim in its monthly email to clients adding that the division between haves and have-nots is likely to grow substantially as competition for new specialized jobs leaves many on the sidelines with obsolete skills.

The firm believes that China, India and other emerging countries are outpacing America in terms of their ability to compete for resources because of their strong export sectors which have lower labor costs and the relatively low indebtedness of their populations.

“Zen International” confirmed that it is conducting exhaustive research on banks and financials in China and India with a view to investing for long-term exposure to the growing middle classes in both countries.

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