China sends barnanke a easter basket (March, dollars, economy, education)

[Swingblade]

Looks like China is about to unload :

China's foreign exchange reserves increased by 197.4 billion U.S. dollars in the first three months of this year to 3.04 trillion U.S. dollars by the end of March.

Xia Bin, a member of the monetary policy committee of the central bank, said on Tuesday that 1 trillion U.S. dollars would be sufficient. He added that China should invest its foreign exchange reserves more strategically, using them to acquire resources and technology needed for the real economy.

China Proposes To Cut Two Thirds Of Its $3 Trillion In USD Holdings | zero hedge
This does not sound like good news but to be honest I have heard it before. I think the day is coming, who would not be sick of their holdings that they have earned being devalued by excessive printing.

As such, all those Americans pushing China to revalue, may want to consider that such an action could well guarantee hyperinflation, once the Fed is stuck as being the only buyer of US debt.

I wonder if Uncle Ben will announce QE3 to the tune of 2 trillion? I bet he does it is the only trick he has in his hat.

[summers73]

With Japan in no position to make up the deficit, who will step up? Britain? Not enough money. Germany? LOL.

[hammertime33]

Pop Quiz: Who owns most of US Government debt?

[summers73]

Originally Posted by hammertime33

Pop Quiz: Who owns most of US Government debt?

"ourselves", but that is irrelevant when the country has no ability to make up the shortfall.

[Swingblade]

Originally Posted by summers73

With Japan in no position to make up the deficit, who will step up? Britain? Not enough money. Germany? LOL.

Uncle Ben went from lender of last resort to the buyer of last resort,you are right with Japan and their problems they might become sellers. The fat lady is stepping up to the mike

[lifelongMOgal]

Originally Posted by hammertime33

Pop Quiz: Who owns most of US Government debt?

The FED. It has been buying 80% of the more recent US debt. Since the FED is private, no, we "ourselves" do not own it.

[Swingblade]

Originally Posted by hammertime33

Pop Quiz: Who owns most of US Government debt?

Easy, Uncle Ben does and he is about to get more:

US Treasuries: China is #2 - Fundmastery Blog - MarketWatch
http://www.fundmasteryblog.net/images/zerohedge--ustreasuryholdings11.23.jpg (broken link)

[Bostonian123]

China is investing in US treasuries because they HAVE to not because they are doing it to help the dollar. Economists call China a net capital exporter (capital that it builds up because of its trade surpluses) and it is a large one. There is no other market in the world that is as liquid and as large as the US treasury market - not even Europe can match it. There are no other alternatives and China must put its dollars somewhere if it wants to keep inflation down. China will continue to pour its surplus dollars into USA debt for a long time no matter what the government says. If you want to learn more about China's economy, look up and read some of the articles by Michael Pettis who is an expert on the Chinese economy.

[bigskydude]

Originally Posted by Swingblade

Looks like China is about to unload :

China Proposes To Cut Two Thirds Of Its $3 Trillion In USD Holdings | zero hedge
This does not sound like good news but to be honest I have heard it before. I think the day is coming, who would not be sick of their holdings that they have earned being devalued by excessive printing.

I wonder if Uncle Ben will announce QE3 to the tune of 2 trillion? I bet he does it is the only trick he has in his hat.

It's only a matter of time:


YouTube - Peter Schiff - Predictions for the Next Decade

[Swingblade]

Originally Posted by Bostonian123

There are no other alternatives and China must put its dollars somewhere if it wants to keep inflation down. China will continue to pour its surplus dollars into USA debt for a long time no matter what the government says. If you want to learn more about China's economy, look up and read some of the articles by Michael Pettis who is an expert on the Chinese economy.

Sounds like they have a 5 point plan, and a couple of those they are already doing such as buying resources and investing in other countries. China was right there when Greece had their fire sale and I think ended up with one of their shipping ports. They could ramp it up.

Tang also said that China should further diversify its foreign exchange holdings. He suggested five channels for using the reserves, including replenishing state-owned capital in key sectors and enterprises, purchasing strategic resources, expanding overseas investment, issuing foreign bonds and improving national welfare in areas like education and health.

I will look into that Pettis guy, I am always looking for info and learning something new.Thanks