Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

China, Japan Boost U.S. Bond Buying to Record Highs
The Wall Street Journal ^ | Jan 16, 2014 | Min Zeng, Eric Morath

Posted on 01/16/2014 10:06:13 AM PST by 1rudeboy

Demand Should Contain Pace of Rise in Bond Yields, Keeping U.S. Borrowing Costs in Check

China and Japan boosted their holdings of Treasury bonds to a record high in November, a sign two of the biggest foreign investors in the U.S. government debt market haven’t fretted about the rise in long-term interest rates.

The activities of foreign investors are highly scrutinized at a time when Treasury yields have climbed over the past year and bond prices have fallen on the prospect that the Federal Reserve would wind down its bond buying this year. Analysts said steady demand from foreign investors would help contain the pace of rise in bond yields, keeping long-term borrowing costs for U.S. consumers and businesses in check.

China added $12.2 billion in Treasury debt in November to $1.3167 trillion, according to the latest monthly capital flows release from the Treasury Department. It surpassed the previous peak of $1.3149 trillion set in July 2011, according to analysts.

Japan increased its holdings by $12 billion in November to $1.1864 billion. The Fed currently owns more than $2 trillion Treasury debt, bigger than any other investors in the $11.8 trillion Treasury bond market.

“While foreigners won’t be the sole source of buying when the Fed reduces its purchases, foreign demand should prevent U.S. rates from rising too quickly,” said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia, which oversees $11 billion in fixed-income assets.

A portion of Thursday’s Treasury International Capital report was released early.

“Due to an error, limited amounts of TIC data were posted on the Treasury website ahead of the official release,” Treasury said in a statement. “As soon as the error was discovered the data was removed.”

Despite the glitch, the release helped boost Treasury bond prices Thursday.

(Excerpt) Read more at stream.wsj.com ...


TOPICS: Business/Economy; Foreign Affairs; Front Page News; Government; Japan; News/Current Events
KEYWORDS: china; goldbugs; japan; wearedooooooooooomed

1 posted on 01/16/2014 10:06:13 AM PST by 1rudeboy
[ Post Reply | Private Reply | View Replies]

To: 1rudeboy

Recall ~ 20 years ago POTUS’s including GHWB and Clinton were terrified that interest rates would jump up if they ran up too much debt. But no more because of stuff like this.

This could also indicate that those countries see a crash coming.


2 posted on 01/16/2014 10:09:30 AM PST by sickoflibs (Obama : 'If you like your Doctor you can keep him, PERIOD! Don't believe the GOPs warnings')
[ Post Reply | Private Reply | To 1 | View Replies]

To: 1rudeboy

In November the Chicoms said they would not be net buyers anymore. They lied.

They are the other half of this codependent debt relationship.


3 posted on 01/16/2014 10:11:07 AM PST by NeoCaveman (DC, it's Versailles on the Potomac but without the food and culture)
[ Post Reply | Private Reply | To 1 | View Replies]

To: sickoflibs
I had a thought that China and Japan were doing it to make us crash, but then I wondered if there are more efficient and less expensive ways to do it, if that is their plan.
4 posted on 01/16/2014 10:11:44 AM PST by 1rudeboy
[ Post Reply | Private Reply | To 2 | View Replies]

To: 1rudeboy

really strange if the ChiComs are continuing to buy these bonds...
their deputy minister has made several highly pointed (and most uncharacteristic, therefore deliberate) critical statements about the poor quality of these investments and how China loses value and is thus subsidizing the American government’s reckless spending binges, etc., and ... that China should pare back its existing portfolio of such holdings.

they are very unhappy, they obviously do lose a lot of value buying paper that pays 2 or 3 percent but depreciates in real purchasing power at maybe 6 to 10 percent, per year.

China obviously has many other places it can invest its surplus dineros, too......

——?


5 posted on 01/16/2014 10:23:03 AM PST by faithhopecharity (C)
[ Post Reply | Private Reply | To 1 | View Replies]

To: 1rudeboy

This has to be orchestrated by the NWO cabal. I guess they need more time to get their ducks in a row before green-lighting the collapse.


6 posted on 01/16/2014 10:23:26 AM PST by MichaelCorleone (Jesus Christ is not a religion. He's the Truth.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: NeoCaveman
In November the Chicoms said they would not be net buyers anymore. They lied.

The Chicoms can say what they want but as long as they want to keep the Yuan (Renminbi) undervalued relative to the dollar they must buy US dollars, i.e., US Treasuries. If they did what they preached the Yuan will go up in value relative to the $ making Chinese exports more expensive wrecking their export oriented economy.

7 posted on 01/16/2014 10:24:26 AM PST by C19fan
[ Post Reply | Private Reply | To 3 | View Replies]

To: MichaelCorleone

And, you are correct. A collapse must be evident because it makes no economic sense to purchase more bonds of a nation already in massive debt...unless


8 posted on 01/16/2014 10:30:21 AM PST by SeminoleCounty (Amnesty And Not Ending ObamaCare Will Kill GOP In 2014)
[ Post Reply | Private Reply | To 6 | View Replies]

To: SeminoleCounty

When the collapse lever is pulled by China and civil unrest and mass chaos ensues within the United States, after the smoke clears, China gets first dibs on intervening with their troops, then planting their flag on our soil.


9 posted on 01/16/2014 11:29:22 AM PST by CivilWarBrewing
[ Post Reply | Private Reply | To 8 | View Replies]

To: faithhopecharity

The Chinese and Japanese are embroiled in their dispute over some rocks in the China Sea. So they both buy a lot of U.S. Bonds. Seems like one side is trying to buy our support, and the other trying to buy us off.


10 posted on 01/16/2014 1:27:56 PM PST by henkster (Communists never negotiate.)
[ Post Reply | Private Reply | To 5 | View Replies]

To: henkster

I guess they figure those rocks have gas and oil under them


11 posted on 01/16/2014 1:30:12 PM PST by faithhopecharity (C)
[ Post Reply | Private Reply | To 10 | View Replies]

To: NeoCaveman

They are the other half of this codependent debt relationship.


We got their crap merchandise and they got our crap dollars.

What else are they going to do with those dollars except buy bonds which are just another form of those dollars.


12 posted on 01/16/2014 1:51:57 PM PST by PeterPrinciple
[ Post Reply | Private Reply | To 3 | View Replies]

To: faithhopecharity

It’s the same the world over - the elites keep their place in line via political power that let’s them spend our money, screw up our economy, and profit from it.

The Chinese elites look around and realize that they have more in common with the American crony capitalists than they do with their own people.


13 posted on 01/16/2014 2:18:11 PM PST by 1010RD (First, Do No Harm)
[ Post Reply | Private Reply | To 5 | View Replies]

To: 1010RD

well, those Communist China “elites” do seem to feel some sort of connection with their American conterparts. Tens of thousands of those elites from Communist China are buying American houses (in the most expensive neighborhoods, the high prices largely the result of these mostly all-cash ChiCom buyers, ironically )....

of course, the rest of the housing market is (for the most part) still badly depressed (as so many Americans are losing their jobs.... and most people still employed cannot possibly afford ....)


14 posted on 01/16/2014 2:24:06 PM PST by faithhopecharity (C)
[ Post Reply | Private Reply | To 13 | View Replies]