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China: The World Does Not Have Money to Buy More US Treasuries (Drudge Headline)
Shanghai Daily ^ | 12/18/2009

Posted on 12/19/2009 12:24:10 PM PST by GVnana

Harder to buy US Treasuries
Created: 2009-12-18 0:13:35
Author:Zhou Xin and Jason Subler

IT is getting harder for governments to buy United States Treasuries because the US's shrinking current-account gap is reducing supply of dollars overseas, a Chinese central bank official said yesterday.

The comments by Zhu Min, deputy governor of the People's Bank of China, referred to the overall situation globally, not specifically to China, the biggest foreign holder of US government bonds.

Chinese officials generally are very careful about commenting on the dollar and Treasuries, given that so much of its US$2.3 trillion reserves are tied to their value, and markets always watch any such comments closely for signs of any shift in how it manages its assets.

China's State Administration of Foreign Exchange reaffirmed this month that the dollar stands secure as the anchor of the currency reserves it manages, even as the country seeks to diversify its investments.

In a discussion on the global role of the dollar, Zhu told an academic audience that it was inevitable that the dollar would continue to fall in value because Washington continued to issue more Treasuries to finance its deficit spending.

He then addressed where demand for that debt would come from.

"The United States cannot force foreign governments to increase their holdings of Treasuries," Zhu said, according to an audio recording of his remarks. "Double the holdings? It is definitely impossible."

(Excerpt) Read more at shanghaidaily.com ...


TOPICS: Breaking News; Business/Economy; Front Page News; Government; News/Current Events
KEYWORDS: bailout; bhochina; bush; bushlegacy; china; clowardpiven; cwii; democrats; drudge; epicfail; marxism; obama; republicrats; tarp; tbills; thecomingdepression; treasonousbastards
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To: 1rudeboy

Higher prices are good. LOL!


81 posted on 12/20/2009 9:14:18 AM PST by Toddsterpatriot (Math is hard. Harder if you're stupid.)
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To: Toddsterpatriot

We are about to hand over one sixth of our economy to the government. And the paleos are quibbling about whether a tariff raises prices, and what sort of a tax it represents.


82 posted on 12/20/2009 9:18:05 AM PST by 1rudeboy
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To: 1rudeboy

The expansion since 2000 has been in China when their favored trade status was made permanent. Fear not, the job sucking sound still hasn’t been heard in Washington. Unemployment will continue.


83 posted on 12/20/2009 9:18:42 AM PST by ex-snook ("Above all things, truth beareth away the victory.")
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To: ex-snook

Listen, we can dispute the underlying causes of our last economic expansion for a long, long time. Denying our last economic expansion even exists “because China” makes no sense whatsoever.


84 posted on 12/20/2009 9:22:40 AM PST by 1rudeboy
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To: misterrob
Grandma wants enough that even with no guns, she still can't have all of it. Or, rather, Dems are bidding that high for Grandma's vote with money they do not have and cannot raise.

As for "pain", methinks the last year counts, and the savings rate increased enough to cut the trade deficit in half in the course of it.

85 posted on 12/20/2009 12:16:43 PM PST by JasonC
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To: Shady
First, there are 435 representatives and 100 senators which last I checked added up to 535 not 525. A quibble.

Second, we just had some collapse, enough to cut the trade deficit in half through increases in the savings rate etc.

Third, entirely agree we can't afford additional middle class entitlements, nor the ones we already have, and the Dems are peddling as fast as they can in the opposite direction from any kind of solution. While blaming the last productive people in the country etc.

As for accountable, I hold the American people responsible for most of it, the Dems too, to be sure. Bush proposed social security reform that would have saved trillions, it died in 3 months in a Republican controlled congress. Obama proposed new entitlements costing trillions, and they pass even with 60% public opposition. Clearly the political system is stacked to spend.

But the people voted for these clowns; pretending it is all the fault of the crew in Washington is pretending. Financial irresponsibility, political blame games, etc - are entirely general, at this time.

86 posted on 12/20/2009 12:23:41 PM PST by JasonC
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To: wiggen
Rates aren't higher. It is still a deflation (overall debt growth is running half normal rates, the government is just the only sector expanding). Demand for dollars in safer forms is through the roof, on general risk aversion everywhere. Every financial institution on the planet is simultaneously attempting to reduce their credit risk, and between lending to deadbeat real estate speculators on mainstreet and the US treasury, they'll pick the US treasury.

We can readily adjust to all of this, but we should not be passing new trillion dollar spending items, we should be repealing ones already on the books, or modifying their terms to save those amounts gradually.

87 posted on 12/20/2009 12:27:18 PM PST by JasonC
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To: misterrob

Or welfare/healthcare deadbeats?


88 posted on 12/20/2009 12:32:38 PM PST by nomad
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To: Chickensoup
Try weaving, you have to build looms, try shoes, very few left, most of the equipment is overseas.

Are you saying, for example, that no one in the United States could build a loom?

89 posted on 12/20/2009 12:35:56 PM PST by Petronski (In Germany they came first for the Communists, And I didn't speak up because I wasn't a Communist...)
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To: JasonC

quite certain i didn’t say rates are higher but that they could be sooner than expected.


90 posted on 12/20/2009 4:37:38 PM PST by wiggen (Never in the history of our great country have the people had less representation than they do today)
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To: Petronski

Are you saying, for example, that no one in the United States could build a loom?

I am saying that most of the capital equipment is gone, that it takes much time to make it, it takes people who can design, build and run the equipment, and that there is far less that there had been in our parents day. Tool and die makers are rare these days, guys who can run the machinces that make the machines are rare. Can we build a loom, yes, but can we build them effiecntly and in needed amounts? Probably not. We have lost and continue to lose our capital.

I wish I could remember the name of the book I read about this recently. fascinating subject.


91 posted on 12/20/2009 6:51:04 PM PST by Chickensoup (We have the government we deserve.)
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To: Chickensoup

It was pretty-much a yes-or-no question.


92 posted on 12/20/2009 6:58:00 PM PST by Petronski (In Germany they came first for the Communists, And I didn't speak up because I wasn't a Communist...)
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To: Petronski

Not really. There is a big difference between building one loom, which is a research endeavor, and the manufacturing of looms which is a capital endeavor.

yes to the former, no to the latter.


93 posted on 12/20/2009 7:01:19 PM PST by Chickensoup (We have the government we deserve.)
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To: Chickensoup

Your absurd underestimation of American ingenuity is noted.


94 posted on 12/20/2009 7:02:41 PM PST by Petronski (In Germany they came first for the Communists, And I didn't speak up because I wasn't a Communist...)
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To: Petronski

Your absurd underestimation of American ingenuity is noted.

You know, twenty years ago I would have agreed with you. But I dont see that anymore. I dont see a widespread ability to improvise and work hard, needed to innovate, manufacture and produce. Are there people? Yes, are there enough? I dont think so.


95 posted on 12/20/2009 8:03:31 PM PST by Chickensoup (We have the government we deserve.)
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To: Chickensoup
I dont see a widespread ability to improvise and work hard, needed to innovate, manufacture and produce.

You need to get out more.

96 posted on 12/20/2009 8:05:03 PM PST by Petronski (In Germany they came first for the Communists, And I didn't speak up because I wasn't a Communist...)
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To: Petronski

You need to get out more.

Perhaps I do. I just do not see it. I see a thin layer of doers and producers and a thick layer of nonproducing people and predators.


97 posted on 12/20/2009 8:17:02 PM PST by Chickensoup (We have the government we deserve.)
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To: wiggen
The same crowd of inflation monger commodity speculators have been screaming that story for the past five years, and gave us the real estate and oil bubbles. It was crap the entire time, as about $15 trillion in nominal capital losses should have made tolerably clear by now. They make the same prediction for a decade straight and hope to "eventually" be right. It is a lying slander against the Fed, all the way down.
98 posted on 12/20/2009 11:56:31 PM PST by JasonC
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To: JasonC

With the exception of oil,i can tell you i’ve not been in the commodity inflation crowd.
My own belief is we will continue to need to sell more debt to a pool of less willing buyers. This country,again my belief,will continue to see stubbornly high unemployment and the corollary extension of social programs which will of course feed our need for capital.
Businesses for the most part,having fired many workers are finding they can get along just fine without them due to productivity gains. The uncertainty of their future liabilities due to this administrations programs will further diminish their appetite for new help.
This pool of unemployed is massive and no matter how they play with the numbers,discouraged workers my butt,the reality is no administration is going to allow millions to be living in tents.


99 posted on 12/21/2009 2:15:31 AM PST by wiggen (Never in the history of our great country have the people had less representation than they do today)
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To: wiggen
Nobody is living in tents. It is absurd hyperbole and a perfect example of the ridiculous doom mongering crap being spread by lying whiners of all parties. Never in history has so pampered and spoiled and fat and lazy a people moaned so loudly at their supposedly horrible hardships. Vomiting Roman patricians had more class.

Rates don't rise due to economic weakness or high productivity, but due to their opposites. Eventually short rates will go higher because lower than zero does not happen. Americans will save to finance their own capital investment - the horror, the horror.

100 posted on 12/21/2009 4:25:46 AM PST by JasonC
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