Posted on 05/20/2024 11:11:26 AM PDT by navysealdad
China sold a record amount of U.S. government bonds in the first quarter of 2024, according to U.S. Treasury data, continuing what many economists believe is a strategic shift away from dollar assets.
In the first three months of 2024, China sold $53.3 billion worth of U.S. Treasuries and agency bonds.
(Excerpt) Read more at newsweek.com ...
Not an economist.
Is China selling them in relatively “small” batches to ot tank the price they get for them?
If they are selling, who is continuing to buy so that the US may prop up its debt spending each day?
Or is no one buying now and we are just printing it without buyers backing it up?
These so-called "economists" need to learn something about economics.
China and Japan are not selling tons of US Treasuries because they want to dump the dollar. Not even close.
They're selling them because their own currencies are such a wreck that they need to artificially prop them up.
How do they do this?
By selling US Treasuries to get US dollars - then using those dollars to buy their own respective currencies.
It's called currency intervention - and it's done by countries who are in economic desperation - not countries seeking to separate from the dollar into other trade mechanisms.
People who don't understand these basic economics are people who also shouldn't be listened to. Either they just don't understand - or they have something else they're attempting to sell - like gold and silver.
Right.
They may be selling for small losses, so when they decouple they won’t be devastated by decoupling.
A Soros approved strategy.
This is not hurting the U.S. if they are selling them then someone else is buying them. I suppose it may be a bigger deal if they let them mature and don’t continuously roll them over. If they sell a treasury that matures in 2030 at 3% interest then the obligation to the US hasn’t changed which means the debt is just as servicable as it was yesterday. The real problem is if the demand for the treasurys statys to decrease. Then they’ll have to increase interest to draw in more demand and that may be a problem because the obligation is increasing. China not renewing bonds or selling them potentially indicates an unwillingness to buy in the future and if that directly correlates to overall demand then there is a story. I think the downgrading of US bonds is a bigger tell.
Silver is up about a $dollar today after a 2 dollar up move on Friday. I am up on silver about 50% this year.
FREEP POST today is the biggest up day in silver I ever remember
I remember Trump saying he wanted $10 Trillion in damages from China for their COVID scam virus release.
The CCP is doing everything they can to get a DimWIT back in but it doesn't look good for the commmmmies.
After President Trump wins in court w/ the Chinese, collecting the debt will be easy if the CCP carries US debt.
Currency intervention is a concept that I think many economists don’t understand. You are exactly correct about countries in dire straits. They sell U.S. Treasuries because the dollar is viewed as a safer and more valuable currency so as to prop us their currencies.
China has been liquidating Treasuries for some time, mainly to subsidize its own problems.
Bring back the gold standard. You can’t have fiat money and democracy. When the govt can print money, that’s what they do to buy voters and the media and the courts.
I really do wish you well.
Having said that, spot price on silver today is around $32.40.
I used to buy gold and silver until I realized it was just a commodity that doesn't perform well in recessions. It only performs when hyped.
I sold my silver at around $42.
In other words, silver dropped and has yet to reach that amount from two decades ago.
Gold and silver will be dropping as we move forward. It's just what commodities do in recessions - same for oil.
The gold standard doesn't mean anything when dealing with debt-based money.
Instead, we should have the Treasury issue our money supply against completed work - not by selling debt instruments enslaving the US population.
The presidents who attempted to bring this about were assassinated.
How will the Federal Reserve decide when to end “quantitative tightening”?
Every country outside the Globohomo Bloc is tring to move away from the US dollar.
When large numbers of countries have a political and national interest motivation, they usually find a way.
Meanwhile, the BoomerCons on here can’t see the danger, and are like:
“The Sterling is Eternal. Brittania will ever rule the waves !”
You wrote this so "matter of factly". Yet without a shred of evidence.
I write based on facts. You write based on emotions.
You're probably referring to the BRICS nations - who are all factory nations and only survive based on sales to other nations.
China is economically destroyed. Even their manufacturing is moving to other Asian nations, like Vietname.
Russia survives through sales of natural gas.
India is a train wreck of a nation whose main export are people fleeing to the US for a better life.
Brazil is a drug-infested place of last resort.
South Africa just exists in BRICS to give the continent of Africa a representative.
These nations are going to disrupt the US dollar as the reserve currency.
Please...
Their U.S. Treasury debt portfolio has dropped almost 40%.
From $1.275 trillion to $775 billion.
However, the time frame is 10 years and 2 months.
I will guess they did NOT sell them.
Interest rates were increasing during most of that decade, which means they would have lost principal if they sold before maturity.
Most likely, they held all their bonds until maturity, and then received a full principle payment.
Did they make investments in other areas? Did they pay down debt? Did they inject cash into their budget?
I do not know the answer.
And to validate your points that this isn't a dump-da-dollar process, I looked up the value of the DXY currency index, then changed the range from 1D to 3Y. At the end of 1Q 2023 it was 102.51. At end end of 1Q 2024 it's 104.30. Thus, the value of the U.S. dollar, as it relates to other currencies, is up. That doesn't mean that we're in a deflationary period (the value of the dollar is definitely going down from inflation). It means that as bad as our U.S. currency's value is going down, other currencies are faring even worse.
Then there's the fact that, as of a year ago, China owned "just" $859 billion in U.S. debt. That's a lot, but that's about 3% of total U.S. debt (of last year's $31.4 trillion total U.S. debt).
So, yeah, if someone is day trading in U.S. treasuries like with the ETF TLT China selling some treasuries is a big deal. To the rest of us it's a nothing burger.
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