A E-P: China To Liquidate US Treasuries


H/t to JohnGaltFLA for this Evans-Pritchard piece on the PRC plans to act like a righteously-indignant creditor.

The sporty-meter just redlined.

12 responses to “A E-P: China To Liquidate US Treasuries

  1. Honestly, we have no one to blame but ourselves. We put ourselves in this position. You can’t blame your adversary for taking a clean shot when you stick your head up out of your foxhole because you can’t stand the stink of your own fart.

    • Actually we have no one to blame but our government. The system is rigged and the policies favored by the people are never enacted. Very few Americans wanted to give China “Most Favored Nation Status” in Trade Relations, yet it was done anyway. Very few Americans wanted our industries and jobs exported, yet it too was done by the government. We had no control over China’s constant devaluing of their currency to make their products cheap over here. Nevertheless, the government will protect itself, and it has a lot of power over China, which depends Very Heavily on trade with the US. The government will just remove China’s status as a trading partner and watch their wealth disappear. Besides, all the crap from China can be made in India or any other shithole in the world.

      • Time to fix the system, or jettison it altogether.

      • WCIII,

        Although the transnationalists in the US Fedgov put the policies into place, it was common Americans who chose to pack big box store parking lots from sea to shining sea every day and buy chinese imports over “made in usa” so they could quite literally save a buck:

        http://www.oftwominds.com/journal08/journal-12-28-08.html

        “Last summer or the summer before in a big box tool section I saw two rows of pliers. One was $9.99 and made in the USA and the other was $8.99 and made in China. I handled both and the only difference was the color of plastic coating on the grips. They could have literally been made on the same factory machine. Guess which row was fully stacked and which only had a couple left? No-brainer. Everyone wanted to save a buck, of course.”

        Similar to the families who have to pay China’s government for the bullet used to execute a prisoner, our fellow Americans pay for the nails in our national economic coffin.

        Difference here is no threat of force for failure to comply –Americans do it gleefully and will even trample each other to get to the latest pallet of imported gadgets on sale.

  2. gardenserf,

    People have to live in the real world. Once bad policy is implemented, you are screwed if you don’t go along with it. With the falling wages in America, of course people are going to buy the cheapest products, but it is a false arguement that that means it is our fault when clearly it is not. People did not choose to export their jobs nor allow every thirdworlder into this country to compete for the remaining jobs at lower wages. I have no doubt that if people could choose between higher wages and American products, or lower wages and cheaper Chinese products, they would choose the former. We Americans have been given false choices for so long, we no longer realize we’ve been had by the “two-party” (one party) system. This is the fault of the government and it’s controllers, which is not the American people.

    • “…which is not the American people.”

      You all voted for the dumbocrats all these years … and here we are.

      You all voted for the repukocrats all these years … and here we are.

      Now, all these people have to do, if they want to see their government, is go look in a mirror.

      • AnHourOfWolves

        +1 on what Curtis said.
        And here’s George Carlin expressing the same sentiment in his own inimitable fashion
        Finally, I will never EVER cease to experience feelings of nausea and utter contempt whenever I see pictures such as this, of a so-called American president bowing to other heads of state. What A fcukin’ disgrace.

      • Curtis, when you say,” look in the mirrior,” look at yourself.

        Did you vote for these policies? I doubt it. Neither did we. Get off your moral High-Horse and face the facts – We’ve been had! The American people did not vote for this shit!

        These are false choices! Repubitards, DemoBiPolards, neither are what we want, but they are the false choices we are given. Stop accepting the BS, and act outside the matrix. Take the Red pill and chill; you are probably the dumbest one among us.

        The most ignorant people I have ever met are the ones that think they are the smartest, or the most moral, or in some fucking way superior to everyone else.

        Dumb ass!

  3. Well AEP is always interesting and provacative, but not always right.

    I thought this was key: “”We would like to buy stakes in Boeing, Intel, and Apple, and maybe we should invest in these types of companies in a proactive way.”

    The Chinese want to invest in American business, and the American people, but not the American government. In a sense they are joining the Tea Party – telling Fed Gov that it’s oversized and not trustworthy.

    As the article points out it’s not a good thing for T-bills, but it’s probably a good thing for US blue chips, the dollar, and even real estate if they choose to invest in that.

    As an American of course it would be better if our T-bill rates stay low, but personally I would not buy or hold US debt at the current prices. But I do own some blue chip stocks. So I have trouble getting really mad at China about having the same realistic view of these things as I do.

    Much is made of Chinese “currency manipulation” but the rules set up by the US and the West allow what they are doing, explicitly. Many other countries maintain dollar pegs. Argentina did all through the 1990s, the Bahamas have since the 1960s.

    Would we really be better off with the Yuan turned over to the floating rates mechanism, which basically allows Goldman-Sachs, George Soros, HSBC, and JP Morgan Chase to set the exchange rates? What makes you think that they would move in a direction beneficial to the USA?

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  6. According to Zero Hedge, countries outside of the U.S. dumped 74 billion dollars in U.S. Treasuries, most of it over the weekend:

    “Over the weekend, we observed the perplexing sell off of $56 billion in US Treasurys courtesy of weekly disclosure in the Fed’s custodial account (source: H.4.1) and speculated if this may be due to an asset rotation, under duress or otherwise, out of bonds and into stocks, to prevent the collapse of the global ponzi (because when the BRICs tell the IMF to boost its bailout capacity you know it is global). We also proposed a far simpler theory: “the dreaded D-day in which foreign official and private investors finally start offloading their $2.7 trillion in Treasurys with impunity (although not with the element of surprise – China has made it abundantly clear it will sell its Treasury holdings, the only question is when), has finally arrived.” In hindsight the Occam’s Razor should have been applied. Little did we know 5 short days ago just how violent the reaction by China would be (both post and pre-facto) to the Senate decision to propose a law for all out trade warfare with China. Now we know – in the week ended October 12, a further $17.7 billion was “removed” from the Fed’s custodial Treasury account, meaning that someone, somewhere is very displeased with US paper, and, far more importantly, what it represents, and wants to make their displeasure heard loud and clear. (Source)

    Undoubtedly, the Chinese and other countries have recently discovered that Italy and Greece, with smaller debt to income ratios than the United States, are less riskier and carry a higher rate of return. This is because, unlike the US, the Rothschild/Rockefeller bond rating agencies have trashed their country’s debt ratings, forcing them to pay a much higher interest rate than U.S. Treasuries. Hey, if you take the risk, you might as well earn the reward!