What if????? Something to think about. What would be Washington’s reaction??? How do we get these politicians to quit this runaway spending??? What say ye???
China has been dumping Treasuries foe years.
What if the US voided the CUSIP numbers to those bonds before they could be sold?
Nice fear porn, but in reality the US dollar is the strongest currency on the planet right now, and the cash flow out of Asia into treasury bonds has China very concerned. Foreign investment in China is down 64% YoY, which is huge.
The Fed’s QT has raised the returns on bonds to levels not seen in many years, and investors are buying bonds at record pace. Central banks have their own agendas, and both the RMB and Yen are crashing against the dollar right now.
Note metals have also dropped against the dollar.
If they dump the Treasuries, they would have to put the money somewhere else, likely with a lower yield. Ironically, the folks who they buy from might take that money and turn around and buy U.S. Trasuries!
The #2 debt holder is the Social Insecurity system.
China owes about 8% of U.S. debt.
Uh...
They won't lose as much money than if they keep them?
They already do, and further politicization of the USD makes it harder to sell new bonds.
The feds are going to get into pensions and then skim the savings of the “rich”.
If I was President, I would close the Fed so they could not print money and tell the bond holders we would not make any more payments. Congress could only spend the money they had and people around the World would stop buying our IOU’s. That means No One Would ever Loan the USA money! Country would need to Live within it means.
They would lose a ton of money. With interest rates going up the value of their bonds goes down. And if you flood the market with more bonds, they’ll go down even more.
It’s something they would do if they thought it’s better to cut their losses now than wait until things get even worse here.
In the short term China and Japan hold enough Treasuries to rock the market on any given day.
The Federal Reserve Bank however, has the ability to step in and buy every one that they might sell, if it seemed important to stabilize that market, and/or interest rates.
“One of the most intriguing mysteries of the last three months is this: Why is Japan, the biggest foreign holder of US Treasury securities, placing so many “sell” orders? In three months, Japanese institutional managers have dumped a cool $60 billion of US paper. “
One of the most intriguing mysteries? Is this guy on crack? At the start of an interest rate rising cycle, currently held bonds lose value so that triggers some selling. Who wants to hold a bond paying 2% when a year from now you can buy one paying 3.5% and avoid holding a capital loss? “A cool 60 billion”?! What percentage of that to $1.3 trillion? 1/2 of 1 percent, in the noise level.
When interest rates are going up, existing bonds actually lose re-sale value, unless they are close to maturity.
My guess - the US Dollar is too expensive for them.
In spite of all the trash talk about the US Dollar, it is currently selling for 104.70 against a basket of currencies.
That is the highest level in twenty years!
Dump = sell.
For a seller to sell there must be a buyer so what’s the difference to the US treasury
For every seller there needs to be a buyer.