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So much for the moronic thinking that China will stop buying our debt. Confucius say; once you owe someone this much you own them.
China, the biggest foreign owner of Treasuries, added $24.1 billion in July after net sales of $25.1 billion in June, raising its stake in U.S. government debt 3.1 percent to $800.5 billion, Treasury data showed on Sept. 16. The country’s holdings have risen 10 percent this year, after a 52 percent gain in 2008 amid the surge in demand for the safety of U.S. government debt as global credit markets froze.
So much for the moronic thinking that China will stop buying our debt.
Indeed, I'm sure they're doing it out of the love they have of us, for whatever reason, and they'll keep doing it forever and ever. So keep moving folks, nothing to see here. China will help you spend that money you do not have.
“The interest rate on long-term Treasury bonds is at a very low level by historical standards,” said David Dollar, the U.S. Treasury Department’s economic and financial emissary to China on Sept. 11 at the World Economic Forum meeting in Dalian, China. “That says that the market has confidence the U.S. will get the fiscal problem under control.”
Our economic and financial emissary to china is named david dollar? that is hilarious.
I wonder if he really thinks that interest rates are low because foreigners are ultra-confident about America's "Fiscal problem".
At some point I thnik you will see pressure to start paying mo0re interest on those treasuries.It alos puts us in a weak position as you rememebr Geithner going to the chinese for assurance they would keep buy ;don't you. Also they can cash in anytime they want.
The degree of intermediation by the Federal Reserve in the issuance of US Treasuries hit a record in Q2, accounting for just under 50% of all net UST issuance absorption.
This is a startling number, as the Fed's $164 billion in Q2 Treasury purchases dwarfs the combined foreign/household UST purchases of $101 billion and $29 billion, respectively, over the same time period. In fact, the Fed was a greater factor in UST demand than all three traditional players combined: Foreigners, Households and Primary Dealers, which amounted to a $158 billion in net Q2 purchases. (zero hedge)
So much yapping about this topic, yet its rather simple. So long as China runs a trade deficit with the US they will have to purchase US financial assets, the least risky being US treasuries. The only way China can stop is if they stop running a trade deficit.
So much yapping about this topic, yet its rather simple. So long as China runs a trade deficit with the US they will have to purchase US financial assets, the least risky being US treasuries. The only way China can stop is if they stop running a trade deficit.
Why? Are you saying if they suddenly stopped purchasing our debt, we'd turn away all their cargo ships and suddenly reopen all our dilapidated/non-existent factories?
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