Posted on 04/12/2021 6:40:56 PM PDT by SeekAndFind
Beijing experienced limited success in its quest to overtake the U.S. dollar as the global trade currency. But it may have an easier time convincing the world of its government bonds as an investment alternative to U.S. treasuries.
So far in 2021, Chinese government bonds have far exceeded the performance of their U.S. counterparts.
Since Jan. 1, Chinese government bonds were relatively flat in terms of returns from Jan. 1 through the end of March. In contrast, the Bloomberg Barclays U.S. Treasuries Total Return index fell 4.2 percent during the same period.
Some investment experts think Chinese government bonds could usurp U.S. treasuries as the de facto “haven” asset.
“China’s emergence as a new and credible safe haven destination for bondholders should gradually chip away at the status of the dollar and U.S. Treasuries as the only safe place to hide,” Gustavo Medeiros, deputy head of research at Ashmore Group, recently told Bloomberg. Ashmore is an emerging market investment firm with almost $100 billion in assets under management as of Dec. 31, 2020.
Morgan Stanley also expects foreign investors to continue pouring into China’s government bonds, as “valuations remain attractive vs. other (developed markets) bonds and provide huge diversification benefits for global fixed income portfolios,” Asia Chief Economist Robin Xing wrote in a March 5 note to clients.
The ongoing push from banks and brokers cannot be overlooked.
Last February, J.P. Morgan Chase added Chinese local government bonds into its JPMorgan Government Bond Index—Emerging Markets. In September 2020, FTSE Russell announced it would add Chinese government bonds to its World Government Bond Index. Combined, these two index additions could drive more than $100 billion of inflows from foreign insurers, asset managers, and pension funds into Chinese government bonds.
(Excerpt) Read more at theepochtimes.com ...
Yeah, the world trusts China... lol.
Hilarious!
What a dumb idea. I think some investment guys are trying to unload Chinese bonds onto suckers.
I can see the benefit in backing a government that can kill with such impunity...
The article author is Fan Yu.
His brother Fahk never caught on that much as a writer. Submissions of article ideas to editors by phone ended when he said his name.
No doubt Bidet will give him starter money
.
Hi.
Interesting.
“Treasures,” backed by the full Faith and credit of the Chinese Communist party and 1.5 billion screaming Chinese.
I say go for it Xi.
5.56mm
Do they trust them more than the US?
Not worried about China replacing the US as Reserve Currency. But, the idea of a basket of currencies may cause some concern.
Losing that status would be devastating imho
Losing that status would be devastating imho
DEVASTATING! Without a doubt.
If the US looses that Reserve Currency status we would be in for a bout of triple digit inflation.
All of those reserve dollars would hit the market and the devaluation of the dollar would be unprecedented.
Our only hope would be that bond holders would be smart enough not to just dump their dollars in a panic sell off.
I don’t hold out much hope for that scenario. People are idiots and no one wants to left holding worthless currency when the crash hits bottom.
You trust the Fed (Powell and his cohorts) and Treasury (Janet Yellen)? They aren’t any more trust worthy than China. The only thing the Fed and Treasury have going for them is that they are our liars and we HAVE NO CHOICE but to believe them till the feculence hits the multi blade rotating oscillating air mover.
Sure, the CCP is known for it’s honesty & square dealing!
I guess it’s time to remove their status as an “emerging economy” then.
Hilarious you say
———-
Think again, history was made a few months ago when it was announced the world bought more Chinese bonds than US Treasury bonds. They pay a higher percent and the world is flocking to them. The Chinese Yuan is also going to digital cashless, and rumor has it by 2024 will be backed by gold holdings, not debt. MANY experts have predicted the extreme downturn in US debt ( dollars and bonds) instruments, and by 2030 the Chinese currency will be the new worlds currency.
I think some investment guys are trying to unload Chinese bonds onto suckers.
exactly
Pretty unlikely scenario.
Only because it is.
history was made a few months ago when it was announced the world bought more Chinese bonds than US Treasury bonds.
The world? Link?
The Chinese Yuan is also going to digital cashless, and rumor has it by 2024 will be backed by gold holdings
Do I have to email my Yuan to the Chinese government? Do they email the gold back to me?
If China wants to be the “World Currency” they need to follow the path the USA used to get there:
1. Create a currency back by GOLD. Not good intentions.
In 50-100 years (however long it takes for the World to
Trust you) you will be the Worlds reserve currency.
2. Move from the Gold Standard to the Silver standard.
3. In another 50 years; your currency will be usable in any
market in the World.
4. Now you can drop the Silver standard and be in the same
place the USA is in right now.
Trying to replace the US green back with a digital currency is like trying to replace the Rolls-Royce with the Yugo.
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