Posted on 01/31/2009 3:51:38 PM PST by maccaca
Future purchases of U.S. Treasuries by China will depend on its need to protect the value of its foreign investments and a stable yuan is in everyone's interests, Chinese Premier Wen Jiabao said on Saturday. The United States said this month that all its major trading partners should operate flexible exchange rates, expressing concern that China was manipulating the value of the yuan to boost its exports. But analysts say there may be a limit to the pressure that the United States can put on China as it is the single biggest foreign investor of U.S. Treasuries, with $681.9 billion as of November, according to U.S. data. "This is a very sensitive question and a question that President Barack Obama will want to ask," Wen said at an event in London in response to a question over future Chinese demand for U.S. government bonds. "In recent years, our foreign reserves have been growing very fast. We are trying to bring more diversification to the holdings of the foreign exchange reserves. Buying U.S. Treasuries bonds is a major part of it. "Whether we will buy more U.S. Treasury bonds, and if so by how much -- we should take that decision in accordance with China's own need and also our aim to keep the security of our foreign reserves and the value of them."
(Excerpt) Read more at reuters.com ...
Wow...refreshing...a nation that looks out for it’s own national interests!
be careful of China, if they did stop their buying of US Treasuries, rates would go up VERY QUICK, supply ( a lot ) demand ( ? )
They are in control at this point and we have to pay the vig!
Was it just yesterday that the Chia-pet was making threats?
Today, China.
Tomorrow, The Duchy of Grand Fenwick?
Seems our credit card might be close to it’s limit.
How much longer before they demand immediate payment in full?
How would that work, exactly?
My understanding is that there is a severe discount involved for early maturation on T-Bills. At that, it’s a voluntary transaction, we don’t have to agree to it.
More likely, if China wanted to hurt us badly and quickly, they could dump their U.S. cash currency on the open market, or exchange it outright. Of course, it would hurt them, too, but I think we’d be BK long before they would even feel the pain of their losses.
They wouldn't do that as it would stop the need for us to buy all their worthless crap. We buy their crap and they use the money to buy our treasuries - mutually beneficial. They won't renege on their part of the bargain.
They're posturing, hoping to intimidate the Fed into an interest rate hike. The Fed will ignore.
Sounds like China is going to stop its regular program of buying US treasuries, so Obama got what he asked for. Now how long do you think it will be before he starts to complain about it?
Chinese gallions on our shores extracting the gold from our fillings i think.
What happens if they stop buying treasuries?
We stop buying their products because their actions will deepen the recession.
Interest rates will go up.
Whereas that will look good to foreign investors that have cash, it will dry up the credit available for purchases of anything purchased in large dollar volume, such as cars, cameras, furniture, etc.
They might threaten it but they are too smart to do it.
If we do not wish to lose our freedom, we must learn to tolerate our
neighbor's right to freedom even though he might express that freedom
in a manner we consider to be eccentric.
No worries, we have a tax cheat to advise BHO.
“They might threaten it but they are too smart to do it.”
If they were smart, they would not have been buying US treasuries in order to manipulate the exchange rate to begin with. They can’t sustain this no matter what Obama says. China’s chickens have come home to roost. Guys like me who’ve been saying all along that the Chinese were idiots to buy so many dollars in that it only benefited us are about to be vindicated, but in a way that no one anticipated. Obama has threatened the Chinese, and now the Chinese are going to give Obama what he’s asked for, but not because he asked for it. Rather, they are going to stop buying dollars because they have no choice. They have finally figured out that it was foolish to invest in dollars to begin with. But to the average guy, it’s going to look like Obama engineered this, and that will be interesting, because it means that all those cheap Chinese TVs and computers are going to become a thing of the past, and Obama will get the blame.
I'm betting on the latter.
If you check some of the other responses to my post, I guess it wouldn’t work.
It's really quite simple. First you get a big pile of paper from Crane Paper. Then you employ a third shift over at the Treasure. Insert the paper into the press, run the press full speed 24/7 and presto, out come brand new $1,000 bills in sufficient quantity to pay off the debt to the Chinese.
If that transpires, you had better hide in a very deep hole!
I was thinking of how the debt would get “called.” When I borrowed $12K from a bank to buy a car, I wasn’t afraid the bank was going to call me out of the blue and ask for it all back at once.
Whether they are EE Bonds or Ten Year treasuries, the holders of these instruments are doing themselves NO FAVORS financing this baloney. We are reaching a financial tipping point soon; we have a third world ruling class and we’re about to get a third world currency.
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