Is China Quietly Dumping US Treasuries?

Is China Quietly Dumping US Treasuries?

www.telegraph.co.uk

Data ... shows that foreign central banks have cut their stash of US Treasuries by $48bn ...with falls of $32bn in the last two weeks alone.

"This comes as a big surprise and it is definitely worrying," "We won't know if China is behind this until...November, but what it does show is that world central banks are in a hurry to get out of the US.
Any evidence that China was pulling out would risk setting off an unstoppable stampede, which is why such a policy would never be announced.

(visit the link for the full news article)

Interesting developments with respect to the markets lately.

With everything going on in the news at the moment it would not surprise me at all that China would take advantage of our inattention to start dumping it's US securities.

Whether or not is just China responsible for these large sales it's a worrying development for the economy.
.

www.telegraph.co.uk
(visit the link for the full news article)

reply to post by Gools


Interesting.

Gold closed over $700 today up $14 and change to close at $705 and change. It seems the evidence is that china is indeed buying gold. First time in over a year gold has been above $700 and its a technical breakout on the charts.

If china is bailing on us treasuries it will only exacerbate the credit crunch here in the US.



[edit on 6-9-2007 by etshrtslr]

I had to read the article twice to believe it. This quote sums it all up;

"This comes as a big surprise and it is definitely worrying," said Hans Redeker, currency chief at BNP Paribas.

Yes, this is worrying news.

This could be China increasing its weight at the APEC meeting.

reply to post by etshrtslr



there's too many web pages, links, etc to list
that the gold markets in both China and India were scheduled to pick up
in/after September....
lots of individuals get married in this time of year, and many year trends show that the demand for gold goes up regardless of the present China
holdings of multi-billions of US treasuries---- as this annual cycle of marriages & buying gold for wedding or dowery reasons cycles around.
~all in all, gold shooting up (at this time of year) is not that unexpected ~


China, from what i hear has been divesting in treasuries and buying
equities/ resources/ and establishing what's being termed 'Sovereign Wealth Funds'... amassing wealth detached from the US Govt. bonds





[edit on 6-9-2007 by St Udio]

If Japan starts dumping the dollar then it would be alot of trouble.

Originally posted by Harlequin
If Japan starts dumping the dollar then it would be alot of trouble.

Britain holds the third largest...

so, hopefully we don't see a chain reaction here.

Originally posted by Harlequin
If Japan starts dumping the dollar then it would be alot of trouble.

Well here is an interesting tid-bit that may be of interest.

Nippon Oil to buy Iran oil in yen

If I am understanding this correctly , and please correct me if I am wrong ...

Oil sales are typically done in US dollars and not the native currency of the purchasing country.

the euro may be the exception ..

Sadly, we all saw this coming as a possibility after the China product recalls. We are seeing the beginning of the end of non-hostile US-China relations. Next step will be for the US to impose a tariff on Chinese goods and a possible drop in Favored Nation status for Chinese trade. This will cause a massive spike in hostile relations between the United States and our Eastern Communist Friends, both in China and the former Soviet Union.

reply to post by St Udio


I do not doubt any of that. The months to come will reveal the true intention of china. Wholesale liquidations of their current holdings with the world knowing their intentions will not help their investment positions nor do I think they are naive enough to tip off their intentions.

For better or worse IMO there is now a symbiotic relationship between all industrialized world markets.

Divestiture by governments and central banks from one market to another is to be expected and is going to more common place in the future.

The only question that remains in my mind is what sort of short term or long term impact on US markets might occur from the largest holder of us treasuries if indeed they are in the process of disinvestment.

As I stated in my previous post if indeed china is divesting from us treasuries, regardless of what other investments they are making, it does not bode well for the US credit crunch or more specifically US interest rates. Which will intern affect the US housing market on all levels and consequently the US economy.







[edit on 6-9-2007 by etshrtslr]

I can think of no better precursor to catastrophic war against the U.S. than the dumping of U.S. treasuries. The petrodollar scam requires the continuous purchase of US treasuries by our vassal states in the Middle East. China was going along for the ride for a while. The usual reaction when someone stops buying oil in dollars or stops buying treasuries is to bomb or invade. That's what we did in Iraq. I fear the shadow government's ponzi scheme is starting to unravel.

www.youtube.com...

This is a terrible piece of news. I just cannot see china blowing us off quite yet, after all are we or are we not their # 1 supplier for goods and materials? Yet here I find growing evidence to support the coming trouble we could be facing in the financial markets... China set to dump trillions of USD? Buying up gold and silver reserves? Who's reserves?

www.halturnershow.com...

[edit on 7-9-2007 by antar]

I'm reading that as of yesterday afternoon, foreign holdings of Treasuries in Fed custodial accounts actually perked a bit after falling for 4 consecutive weeks. On the other hand, foreign central banks continued to reduce their holdings of 'U.S. agency debt'...so in the end, foreigners remained net sellers of U.S. securities (all types). If the debt ratio continues off-kilter, the only fix is the printing press.

Gold this week has more to do with the Dollar than with the Chinese buying 'Lucky Balls', or Indians ramping-up for festival & wedding season. Gold usually gets a seasonal push from Asian holiday buying, but not necessarily a large, sustainable push (see 2006). Higher Gold prices and volatility can dampen Asian holiday buying. On top of this, it has become a pattern to see Gold rise overnight in the Asian markets, only to be bushwhacked an hour or so into the U.S. markets. The economic powers-that-be have a sincere stake in capping the price of Gold as an honest inflation indicator.

What we're seeing this month is a reduction in commercial short-of-gold contracts, a large increase in open interest longs, and Gold ETF's increasing their holdings to record highs. One report yesterday described a short-of-Gold COMEX pit trader wandering the floor in tears...calling for mommy! I wish it were true

Basically, an escallating price of Gold = a vote of no confidence in the U.S. Dollar.

Bazillion$ have entered the system in the last few weeks, and the markets have priced-in a rate cut. How long before this monetary inflation translates to price inflation. Oil is up again, and grain futures recently went parabolic

Originally posted by OBE1
a vote of no confidence in the U.S. Dollar.

Good info OBE1.

Here's a related thread where I point out that today the dollar index has fallen below support at 80: Stocks [and Dollar] Plunge After Weak Jobs Report
.

Wow this trend will cause massive devastation to the north american economy

This is interesting...
I have no doubt China does not trust the US given it's military aggression.
China probably thinks "after the Middle East, are we next?"
So it tries to destabilise (with the help of Russia and maybe a few others) the US economy as a defensive tactic, while stocking up on gold (the original money).

Thank You Gools...just passing-along what I get from others more informed than myself....

....but always tainted by my own mischievous spin

I'll be sure to check-out your Stocks [and Dollar] Plunge After Weak Jobs Report thread...hot topic!

reply to post by Gools


Over a year ago a stock broker friend told a group of us on holiday to get out of all markets and convert money to gold or Swiss Francs. He told me the US dollar, the Canadian dollar and the Peso in Mexico would completely collapse along with the market before we could blink.

I should have taken his advice much sooner.

Every time I begin to think about the Communist Chinese holding so much US currency, I wonder if US Americans ever curse Nixon for opening up their nation to Communist China and its incredible Pandora's box. I also see not only China but other countries making subtler currency moves and it is tragic that the Communist China has such a sword of Damocles over an entire people -- and most of the US people have no earthly idea about it or what it means for the future of their Homeland.

Perhaps reading Cormac McCarthy's "The Road" is in order, or Miller's "The Canticle for Leibowitz".

Originally posted by OBE1 If the debt ratio continues off-kilter, the only fix is the printing press.

Quite so. But these days they don't even need to print anything. The Federal Reserve Bank in the USA can just conjure the dollars from the thin air and enter them into bits and bytes.

I believe the actual economic disaster in its fullness will fall on the next President's watch. Should it happen under this President, he has the powers -- mostly arrogated to himself -- to put the USA under Martial Law and turn it into a prison.

Originally posted by infinite
I had to read the article twice to believe it. This quote sums it all up;

"This comes as a big surprise and it is definitely worrying," said Hans Redeker, currency chief at BNP Paribas.

Yes, this is worrying news.

This could be China increasing its weight at the APEC meeting.

Thats interesting, they wont tell it publicly, but people know it..China could use it as leverage in the APEC meetings.
Maybe they've started this dumping so it has more effect at this moment while the mortgage[credit] crisis is ongoing and the weak jobs report from today. Either way, it'll have its impact..