Posted on 02/17/2010 6:18:37 AM PST by TigerLikesRooster
Japan eclipses China as top US Treasury holder
(AFP) – 23 hours ago
WASHINGTON — China's holdings of US Treasury bonds tumbled in December, allowing Japan to take over as the top holder of American government debt, according to Treasury data released Tuesday.
China's bond holdings dropped substantially to 755.4 billion dollars in the last month of December from 789.6 billion in November, said the Treasury's international capital data report.
Japan's holdings increased to 768.8 billion dollars in December from 757.3 billion dollars in November, according to the data.
China had grabbed the top position from Japan in September 2008 and gradually increased its US bond holdings in relation to Tokyo until December last year, Treasury figures showed.
Beijing had expressed fears late last year about the safety of its dollar-linked assets in view of Washington's burgeoning budget deficit and the declining greenback at that time as the American economy struggled to emerge from a brutal recession.
US Treasury Secretary Timothy Geithner traveled to Beijing in June to reassure Chinese leaders, saying their money is "very safe" despite the US budget deficit, which he pledged to cut.
But Chinese state media expressed opposition to Beijing's policy of buying massive amounts of US debt, saying the value of China's assets could be battered as a result of the global financial crisis.
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P!
I’m glad somebody has a yen for them.
I guess the Euro which just replaced the Dollar is now going to be replaced by the Yen. Heck, I cannot keep up with our current currency.
Uh Oh. Obama credit no good. Would you buy anything backed by the full faith and credit of Barak Hussein Obama?
How do you say “Do I look like Mrs Obama?” in Japanese?
He tried to pay them back in ‘clunkers
:)
To a large extent we defend Japan.... Part of the deal is they don’t dump T-Bills. Taiwan and Korea hold T-Bills for the same reason
If China and others are selling off their T-Bills, who are the buyers and why?
If we have inflation, interest rates will rise, bring the price of t-bills down, so short-sellers would win. If we have deflation, rates will remain low, and long sellers will win.
So it all seems to come down to inflation vs deflation. Personally, from what I have read, I believe we are in for deflation. I don't believe the money printing will work. We are going to go through massive deleveraging for some time, which will keep the economy down, keep job growth down, etc. The gubmint debt will only make it worse and more protracted. This is US in the 30s or Japan in the 90s. In Japan, yields went to 0%.
But hey, I'm just a layman. I could be wrong.
They arent selling off as much as they are just not buying with the same volume, and their holdings have decreased in value.
They wont do a major selloff- it would only devalue their holdings even further.
I heard someone from Blomberg on the John Batchelor show talking about this last night. He also stated he believes a bond market collapse is virtually inevitable.
Better Japan than China.
Yes, they cannot dump them into the market in large quantities. In general terms, they are stuck with T-bills. Whether China sells them or keeps them, it will lost much of their value.
Someday very soon a treasury auction will fail.
Someone in China has finally started paying attention.
Hey BO, whose gonna buy those $2 trillion in new debt? The Federal Reserve?
The Chinese have been moving to short term T-Bills over the last few years
So if they don't roll them over then are owning fewer and fewer T-Bills
The consensus is they're going into the big box in the dark part of the sub-basement of the NY Federal Reserve.
If they were to actually stop doing that...we could reliably undermine the Obama spending machine. And the peg would collapse, and the yuan would skyrocket...putting an end to the further outsourcing...and maybe even bring some industry back home where it belongs.
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