Just pointing out, this is posted by a China-resident FReeper.
:)
China has to sell it’s T bills to support the Yuan.
Used to be they only benefited from a low Yuan, but no longer.
There is not really a concern with any country “dumping” bonds.
China would take an increasing loss the more they tried to get rid of, and the US can simply raise it’s provided interest rate a bit through the ordeal to continue to sell new bonds.
Then the interest rates would go down, once parity was again found.
China can’t outdo what the Fed is already doing with quantitative unwinding. The Fed is dumping Treasuries at a pace of half a trillion per year.
US Dollars for Yaun.
Yawning
I don’t understand the concern. Whoever holds the debt, the US is obligated to pay the same amount.
I wish the natering nabobs of negativity who have lead this nation into decline would finally shut up, because they have been completely wrong for decades.
The interest rate on the 10 Year Treasury has been dropping for seven consecutive months.
The current rate is 2.32%.
That is just 1% higher than the all time low of 1.37%.
If there was going to be some kind of financial crisis involving the US Dollar or USA sovereign debt, the interest rate would be moving sharply in the other direction.
$1.2 trillion in securities?
Good luck finding enough buyers to cause any damage ...
Let them do it. Its bound to happen sooner or later.
Its time we as a nation stopped knuckling under to China.
...from behind the Red firewall. The message(propaganda) was Approved by the Communist a Party of China.
The kind of ideas in this article keep cropping up at times of crisis. They are usually ignorant.
1. While it is true that China is currently the largest of the foreign holders of U.S. treasuries, ALL foreign holders of U.S. treasuries amount to a little less than 30% of all outstanding U.S. debt. 70% of U.S. debt is held by U.S. domestic private and government holders.
2. China could “dump” all the U.S. treasuries it wants to, and all it would do would be to make it easier for other foreign holders of U.S. debt to buy it up, and quickly they would.
As it is, this gambit by the Chinese is a big mistake for them... we ARE the world's reserve currency... and while command economies might not get the implications of that for their GDP, WE get it...
The FED just buys them up at a discount. Trump is happy.
Simple counter threat :
BOYCOTT EVERYTHING FROM CHINA
That would do FAR more harm to them and derail a huge chunk of their economy.
Seize Chinese assets/bank accounts in US to pay off any broken deals where Americans lose due to the boycott.
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Is it even possible to Reissue/Replace (one for one) securities held by all ‘friendly’ countries and refuse to honor the securities held by the ChiCom enemy nation ??