Bump.
well the George Bush honeymoon of low taxes-—high spending / endless line of credit had to end sometime
a shame our government has so completely screwed us (citizens) with regard to our currency, trade, and fiscal policy. The dollar loses more in buying power each year than any normal interest-return will replace, ignoring tax on the interest as well.
This momentum is undetectable by mere mortals, but something is causing my uncle's bunions to act up.
Well, if they are selling then someone is buying and judging from the yields, the sellers made a nice profit.
bttt
This could be an indication of their fear of the effect on the US economy that might come about if a Dim is elected president next year.
Watch if Thompson entering the campaign might result in a decline in Chinese sales of US bonds.
Money is one of the most important inventions of humankind. Without it, a complex, modern economy based on division of labor, and the consequent widespread exchange of goods and services, would be impossible. Unfortunately, many experts believe we are on the verge of a financial crisis. In recent years the value of the US dollar has dropped significantly, inflation has increased, consumer debt has reached an all-time high, and the US housing market has become dangerously unstable.
At present, approximately two thirds of world trade is conducted in dollars and two thirds of central banks' currency reserves are held in the American currency which remains the sole currency used by international institutions such as the International Monetary Fund. This confers on the US a major economic advantage: the ability to run a trade deficit year after year. US always spends more than it earns, whereas the rest of the world always earns more than it spends.
The strength of the dollar is closely related to the fact that oil, the most important commodity traded in the world, is priced in US currency. The majority of countries that are oil importers have to buy their oil in dollars, which forces them to keep most of their foreign currency in dollars. However that could change. More and more nations are moving away from the dollar. China, Sweden, Italy, Switzerland, Iran, Russia, the United Arab Emirates and others have already announced plans to gradually move their reserves from the dollar into other currencies such as the euro. A widespread move away from the dollar could cripple the US economy - a sudden shift could even cause the US dollar to crash. David M. Walker, Comptroller General of the United States, has warned that the nation is on the path to financial ruin: "What they don't talk about is a dirty little secret everyone in Washington knows, or at least should. The vast majority of the economists and budget analysts agree: The ship of state is on a disastrous course, and will founder on the reefs of economic disaster if nothing is done to correct it." If the US government conducts business as usual over the next few decades, a national debt that is already $8.5 trillion could reach $46 trillion or more, adjusted for inflation. A hole that big could paralyze the US economy; according to some projections, just the interest payments on a debt that big would be as much as all the taxes the government collects today. And every year that nothing is done about it, the problem grows by $2 trillion to $3 trillion (yes, that's with a "t"). It doesn't take a genius to recognize that an economic upheaval is in the making.
time to raise interest rates
China with the help of the Clintons, ala HSU, the Soros’ and maybe the Lewis’ are ALL trying to destroy America’s dollar and economy.
It’s no secret. They threatened to take our currency down the tubes, in an article reported several week ago, if we didn’t start playing nice with them and stop all this folderol about whining when we find a little poison in their foods, and lead paint in their toys, etc. It was a very clear threat, albeit veiled by using some little non-important minister of somethingerother to issue the statement.
Everyone should have a diverse portfolio.
Nice to know the ChiComs are prudently investing for retirement.
Or whatever they have in mind.
“Mr Powell said the switch out of Treasuires was a purely commercial decision. “If if turns out that the Chinese are behind this, it is merely an attempt to increase returns on investment. It has nothing to do with settling protectionist scores,” he said.”
Liberal or conservative WSJournal type, hard to discern. China does not practice “free trade” and is strategically “protectionist” to its great success. If America take an action to protect itself China’s reaction is merely...a reaction to American flaws, ie it is “settling” the score, rather than acting in its interest in a long strategy of selective pro-Chinese trade actions.
US bond dealers: "For you? Nada."
For the last 15 years, pundits from both political parties have been ranting about China acquiring US Treasuries, so I would think this development ought to make them happy.
I also believe China and India are quietly buying up gold. A couple of European banks dumped a few hundred tons of gold on the market a month ago and the action did nothing to bring down the price. The price of gold is back where it was a month ago.
Goldman Sachs got caught with its shorts down.
Great. The Chinese are doing nothing to hurt us; they are protecting their interests. It is the US POLITICIANS who fail to balance the budget, bring back an “Honest Dollar” (R.Reagan) and permit unchecked imports, export of jobs and illegal immigration. In the absence of any worthwhile measures by US Politicians, the sooner the better to wake up the Pols.
Or, does China foresee something in our future?
Once upon a time, there was a near-panic over insufficient liquidity in a world economy. It was triggered by an alarming rate of default on high-risk mortgage debt (or so the markets decreed). It was exacerbated by the chilling realization that the value of derivative instruments based in some fashion on this high-risk debt simply could not be determined.
Despite the fact that this panic was attributed to problems in US financial markets, where did capital flee? To US TREASURIES. That’s right. US TREASURIES. The same ones supposedly being dumped as risky and “worthless” by the Chinese.
Not just US capital, but capital from across the world got parked in good old US TREASURIES to sit out the panic.
My, how soon we forget... that was all of TWO WEEKS AGO!