China's Share of US Treasurys Quietly Falls (Shifting investments to hard assets)

Wall Street Journal ^ | 12/17/2012

[SeekAndFind]

We have Republican Rep. Michele Bachmann of Minnesota to thank for that bon mot

[SeekAndFind]

Of course, we all know who is buying our own debt --- THE FED. The Federal Reserve, now has 77% of its holdings maturing in more than 10 years.

[Bayard]

Its all Monopoly money!

[PGR88]

China has $3.3 Trillion in reserves and it took 18 months and approval by Canada’s Parliament to allow them to buy a Canadian oil company worth $15 billion.

So it took them that much time and trouble to be able to put 0.4% of their reserves into a “hard” asset.

Makes me think
- There aren’t enough “hard” assets out there for China’s money, let alone other surplus nations
- They are stuck with T-Bills for a long, long time...

[NVDave]

They might be in T’s for a long time.

But the danger for us isn’t that they start selling.

All they have to do to cause us problems is quit buying new issuance.

This is part of why the Fed is picking up the slack. Sooner or later, the Fed will have no more credibility - their leverage on their balance sheet holdings is up to about 55:1 now... and their already-announced plans will put that over (perhaps well over) 60:1.

When a central bank is that highly levered, the smallest of interest rate changes causes big, big problems.