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| Economy |
| China sells US bonds to 'show concern' |
| 2009-06-17 |
| Via InstaPundit A decision by China to reduce its US Treasury holdings suggests concern about the US attitude towards its economic woes, Chinese economists were quoted as saying in state media Wednesday. The remarks, coming after US data showed a modest decline in Chinese investments in US government bonds, were in contrast to an earlier statement in Beijing which had said the recent sell-off was a routine transaction. "China is implying to the US, more or less, that it should adopt a more pragmatic and responsible attitude to maintain the stability of the dollar," He Maochun, a political scientist at Tsinghua University, told the Global Times. According to US Treasury data issued Monday, Beijing owned 763.5 billion dollars in US securities in April, down from 767.9 billion dollars in March. It was the first month since June 2008 that Beijing failed to purchase more US T-bills. Zhang Bin, a researcher at the Chinese Academy of Social Sciences, said China's move showed a more cautious attitude. "It is unclear whether the reduction will continue because the amount is so small. But the cut signals caution of governments or institutions toward US Treasury bonds," Zhang told Xinhua news agency. China's foreign ministry said Tuesday that its purchases of US Treasuries remained based on "security, liquidity and value preservation". For Zhao Xijun, deputy director of the Finance and Securities Research Institute of People's University, China may have reduced its holding of US Treasuries simply because it needed the money. Zhao said the sell-off could have been in order to pay for its own economic stimulus package. "The reduction was a result of composite factors, such as the investment need and the market change," Zhao told Global Times. Perhaps Americans will show similar concern over deficits and raise tariffs. Gradually of course. |
| Posted by:ed |
| #9 CHINESE MIL FORUM > ECONOMIST ANY XIE: WORLD HEADED FOR A BIGGER CRASH IN 2010; + THE AMERICAN EMPIRE IS BANKRUPT + CHINA'S DEBT BOMB!? * WAFF > WORLD COMPETITIVE RANKINGS BY THE WORLD ECONOMIC FORUM [USA is still #1]; + BRIC OR CRIB??? |
| Posted by: JosephMendiola 2009-06-17 19:09 |
| #8 ...and China's too. Their refusal to float the yuan against the dollar also precipitated this. Had the yuan rose against the dollar for the last 10 years, their exports would have been lower and the amount of Treasuries they gathered would have been fewer. Had the system been allowed to operate without the interference, their position would be more stable in the long run on those points, but they bet on an unending growth cycle and maximized internal development through exporting which is now headed for a very sharp decline. They are short of being able to replace America as the engine for the world economy. Now we're all on a ride 'in interesting times'. The Chinese could still opt for severe losses and trash the dollar hoping that in the end they'll end up in the better position when it all settles. If the idgits in the Beltway keep ignoring their warnings, they may just take that up. Think dumping the holdings to the IMF which in turn would then leverage Washington the way they leverage any other third world kleptocracry. |
| Posted by: Procopius2k 2009-06-17 18:22 |
| #7 A far amount of China's growth was fueled by the US going into debt in a manner that is proving to have been quite insane. Our economic crisis is also China's. |
| Posted by: Anguper Hupomosing9418 2009-06-17 16:40 |
| #6 Tipper: There are many mechanisms for laundering money, but regardless of how it's done selling dollars reduces their value relative to other currencies and buying yuan increases its value relative to other currencies. China still has an export oriented economy, and like other asian economies is still trying to depress the value of its currency relative to the dollar. It is the basic conundrum that China faces and is trying to manage at the moment. when you take out a big enough loan, you own the bank Only until the bank decides you're never going to pay it back. After that its throwing good money after bad. China is already there; they're just trying to figure out how to keep their own economy going without making the problem worse. Hence their treasury holdings haven't grown. |
| Posted by: DoDo 2009-06-17 16:23 |
| #5 Just a hint... Fix your mortgage rates! |
| Posted by: Bright Pebbles 2009-06-17 16:13 |
| #4 when you take out a big enough loan, you own the bank |
| Posted by: 746 2009-06-17 16:07 |
| #3 Unlikely. This would require that they sell dollars for yuan, which would accelerate the rise in their currency Not really Dodo, the dollars can be laundered through the UK and the Carib FC. Graph #1 is the Japanese carry trade year. Graph #2 is the collapse of global finances year. Note that London funneled massive amounts of foreign money into the US. Now, it is flowing the other way. And Japan funneled most of its international funny money which was denominated in dollars, to Europe in 2006-2007 while a year later, the flow switches suddenly from Europe straight to the US. China is the ball at the top and the US flow to China was big in 2006 and then, this money flowed to the pirate islands in the Caribbean which is the ball near the bottom. OPEC is the ball at the very bottom of the graph. Notice that the Chinese money flowed from the pirate coves back into the US. Now, the OPEC nations are using euros so money is flowing from Europe to OPEC while money is flowing OUT of the US to the PIRATES [thanks to Bernanke and Geithner bailing out all these criminals!] and this money is flowing toÂ…CHINA!!! |
| Posted by: tipper 2009-06-17 15:29 |
| #2 Zhao said the sell-off could have been in order to pay for its own economic stimulus package. Unlikely. This would require that they sell dollars for yuan, which would accelerate the rise in their currency. The stimulus is being paid for by lending and government spending. More likely the decrease is due to allocating dollars to raw material purchases. |
| Posted by: DoDo 2009-06-17 15:02 |
| #1 Perhaps Americans will show similar concern over deficits and raise tariffs. Gradually of course. Bit late for that, I'm afraid. China is as welded on to the US as its manufacturing sector as the South was as its slavery sector. It would take a civil war to disengage. |
| Posted by: tipper 2009-06-17 13:34 |
