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Old 12-02-2008, 07:15 AM
 
12,360 posts, read 7,951,989 times
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Default china to dump billions of united states treasury bills

China to dump billions of dollars of US Treasury Bills
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Old 12-02-2008, 07:19 AM
 
Location: Great State of Texas
74,377 posts, read 34,553,341 times
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Why do you think Bernake said yesterday that the Fed would start buying Treasuries ?
China announced a few weeks ago that it would be spending it's money in it's own country to help its own economy.

When the Fed has to start buying Treasuries that indicates that no one else will.

The writing was on the wall..just not printed by the MSM.
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Old 12-02-2008, 07:30 AM
 
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yes, agreeing that the fed itself is thinking (out loud) of buying treasury bills to sustain the value of the US dollar. (re china's decision to dump treasury bills). these investors "tiny returns" are set to take a massive hit once the run on the dollar starts. And start it will, its not a matter of if, its a matter of how soon and how drastic the foreign dumping of American dollars is. the US dollar has been strengthening over the short term as large scale investors based in US have been liquidating foreign holdings in massive amounts in order to bring money home to cover margin calls and other risk exposures at home. When they do this, they receive the money in the foreign funds, and to repatriate have, of necessity, had to buy US $ with it. The amounts transferred in this fashion have been truly massive and have artificially boosted the US $ in the short term (supply and demand).
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Old 12-02-2008, 07:41 AM
 
1,959 posts, read 3,021,820 times
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what are they saying lately? that article is dated March 10, 2007.
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Old 12-02-2008, 07:48 AM
 
12,360 posts, read 7,951,989 times
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you are correct that i printed the old story. i have to find the new story again and pull it up.
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Old 12-02-2008, 07:51 AM
 
Location: western East Roman Empire
3,734 posts, read 5,900,245 times
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Quote:
Originally Posted by HappyTexan View Post
Why do you think Bernake said yesterday that the Fed would start buying Treasuries ?
China announced a few weeks ago that it would be spending it's money in it's own country to help its own economy.

When the Fed has to start buying Treasuries that indicates that no one else will.

The writing was on the wall..just not printed by the MSM.
Despite the wishes of Paulson, Bernanke and that ilk, it is unlikely that the Chinese, Arabs et al will lend consumption-heavy Americans another $2 trillion to reflate the bubble.

The question is, will they turn the spigot off all at once, or still allow a moderate stream?

The article cited is more than a year and a half old, though probably still valid to some extent. Equally interesting on that site was the story about behind the scenes in the Citigroup bailout.

The US banking system, like housing before it, is in the process of being nationalized. The question is, to what extent will the nation, if its integrity is maintained, will channel enough resources to producing long-term real income-generating productive assets (not centers of consumption, like housing, and not paper assets, like MBS), and whether the pace of any shift in that direction is faster or slower than the slowdown or cut-off in global credit to the US.

The best case scenario is a balance between a shift toward domestic production and a slowdown in global credit. This is possible if the US cooperates in the upcoming G-20 meetings, implying to some extent a loss of sovereignty, and there are many who would lament this, even build an ideology around it in an attempt to force another outcome.

What does a responsible parent do with a teenager than abuses a credit card, for example?

Sooner or later, we'll see who is spoiled, possibly a spoiled monster, and who isn't, who is responsible and who isn't, we'll see who deserves sovereignty and who doesn't.

Current US leadership is horrendous, nor does the incoming leadership inspire confidence: they keep talking about ways to prop up consumption based on some magical formula of high housing prices, itself a center of consumption.

These people are too dense to realize and make realize:

production - consumption = saving + investment

Good luck!
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Old 12-02-2008, 08:12 AM
 
41,648 posts, read 44,930,403 times
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That source must be noit too relaible if they have to post the same story almost a year later. Seems better to have a financial new source confirm.
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Old 12-02-2008, 08:14 AM
 
Location: Great State of Texas
74,377 posts, read 34,553,341 times
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I found a more recent link:

Premier unveils NT$500 billion stimulus package - The China Post

snippet:
"Premier Liu Chao-shiuan gave a report to the lawmakers of the ruling Kuomintang (KMT) yesterday about the government’s plan of allocating NT$500 billion over the next four years to carry out a new wide-ranging economic stimulus program. "

It's in their best interests to stop relying on American consumers and America itself to keep their economy going; they have to build up their own infrastructure and economy - something they should have done years ago. That will bring up wages and the standard of living for their people.

That is what free trade should be all about..not sucking the life out of one country at the expense of another.
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Old 12-02-2008, 08:18 AM
 
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Bernanke Says Fed May Buy Treasuries to Aid Economy

Bloomberg.com: Worldwide

He's already started buying mortgage debt since the foreign governments have been dumping those and buying treasuries. With trade deficits declining, they're not going to accumulate as many reserves to fund what may be 1.5-2.0 trillion dollar US budget deficits the next two years.
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Old 12-02-2008, 08:48 AM
 
Location: Albemarle, NC
7,730 posts, read 8,670,018 times
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The Fed buys treasuries on money it lends to the Treasury? WTF?
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