CHINA WILL CUT HOLDINGS OF U.S TREAS FROM CURRENT ABOVE $1T TO ABOUT $800B - page 2.

abhiseshakana

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Quote from: Hydrogen on September 04, 2020, 07:59:36 PM

China, russia, japan and others have implemented "US de dollarization" policies over the past 10+ years.

They've drastically reduced holdings of US bonds, dollars and debt. The federal reserve is now the largest holder of US bonds.

Its not the most equal relationship in global affairs, seeing as how the federal reserve (probably) loans free cash to foreign banks to stimulate foreign economies. While foreign nations are unwilling to do the same for the united states.

Yuanization and dedolarization are just bluffs without any meaningful action. If China releases US bonds, under current conditions the US cannot possibly pay. If the US prints new debt to repay a debt to China, the value of US bonds will fall on the market and the yield will be higher. then the dollar value will fall. So that US companies have difficulty getting investment funds in the market. On the other hand, the RMB currency will strengthen further so that the cost of production in China is high and reduces the competitiveness of Chinese goods in America. The ending is the threat of layoffs in China.

In fact, China is bluffing but still holding US bonds by continuing to print RMB to buy dollars, with this trick, the RMB is devalued and the dollar strengthens which is certainly beneficial for China because the price of Chinese products is increasingly competitive and money continues to rotate in China. So it can be concluded, there is a symbiotic mutualism between China and the US, China helps America to print money by owing it to China.

https://www.thebalance.com/who-owns-the-u-s-national-debt-3306124
https://www.thebalance.com/u-s-debt-to-china-how-much-does-it-own-3306355

hugeblack

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Is this news confirmed because I did not find it in the headlines?
Reducing TREASURIES by 20% in one year is considered very high, but what is the reason?
The trade war is still cold, and neither side has used the policy of maximum pressure. It will also be a tool to force the other side to make concessions that make the negotiating position better.

If the trade war between the two countries intensified, we may witness the use of some pressure cards, but I do not think that the countries will go far in this, most likely it will end with the banning of some companies.

bryant.coleman

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Quote from: Febo on September 04, 2020, 03:35:15 PM

Quote from: bryant.coleman on September 04, 2020, 06:32:26 AM

Interest rate yield for the United States treasury bond has gone well below the inflation levels for USD. So holding these bonds can actually result in a net loss for the investor. Gold has proved to be a much better alternative, and it's price has increased by more than 60% since the last three years. The central banks of China and Russia have shifted more to bullion these days.

Exactly! China is most likely buying gold or gold mine shares as Warren Buffet does. I am surprised China still held so many US treasury bonds after USA showed as so unreliable partner over last few years. Well at least the were not increasing the amount as they did in years before.

Almost all the major economies used to hold huge quantities of United States treasury bonds, as these were considered as the most stable investments using fiat currency. If I am not wrong, Japan is the largest holder of the United States treasury bonds. I am not sure about China, but they used to be at no.2 position. Now they are taking steps to reduce their holdings.

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Quote from: Hydrogen on September 04, 2020, 07:59:36 PM

China, russia, japan and others have implemented "US de dollarization" policies over the past 10+ years.
They've drastically reduced holdings of US bonds, dollars and debt. The federal reserve is now the largest holder of US bonds.

If China holds US bonds, the US is doomed, they will all be slaves of China.
If China sells US bonds, the US is doomed, the de-dollarisation is the end of the US.
If a bear takes a dump in the US, the US is doomed, even bears are shitting there, if a panda drops a dump in China, oh, a sign of good luck!!!

Even if the unemployment would turn negative, the debt will be erased, the GDP would grow 100% a day, and the US the only country left on the surface of the earth and people would still talk about how this is bad for them.

Also, in 2016 Japan held 1.13 trillion of US bonds, now it has 1.26, so....nope! Grin

Quote from: audaciousbeing on September 04, 2020, 06:47:20 AM

So, if China should reduce the holding of US treasury, its just sending a message that we could crash it if we wanted to, it depends on the level of cushions that they themselves have put in place.

Quite the opposite, decreasing their holdings makes them irrelevant, like a guy with 1mBit wanting to crash the price on binance.

jaysabi

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Quote from: Hydrogen on September 04, 2020, 07:59:36 PM

China, russia, japan and others have implemented "US de dollarization" policies over the past 10+ years.

They've drastically reduced holdings of US bonds, dollars and debt. The federal reserve is now the largest holder of US bonds.

Its not the most equal relationship in global affairs, seeing as how the federal reserve (probably) loans free cash to foreign banks to stimulate foreign economies. While foreign nations are unwilling to do the same for the united states.

Do you not recognize the folly of premise a belief or economic view on something that you don’t know happens? If you have any evidence to suggest the Fed loans free cash to foreign banks, that’s one thing. But you’re just throwing unsubstantiated ideas out into the ether and then using that to conclude something isn’t right (in this case, the lack of reciprocity.)

Hydrogen

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China, russia, japan and others have implemented "US de dollarization" policies over the past 10+ years.

They've drastically reduced holdings of US bonds, dollars and debt. The federal reserve is now the largest holder of US bonds.

Its not the most equal relationship in global affairs, seeing as how the federal reserve (probably) loans free cash to foreign banks to stimulate foreign economies. While foreign nations are unwilling to do the same for the united states.

Febo

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Quote from: bryant.coleman on September 04, 2020, 06:32:26 AM

Interest rate yield for the United States treasury bond has gone well below the inflation levels for USD. So holding these bonds can actually result in a net loss for the investor. Gold has proved to be a much better alternative, and it's price has increased by more than 60% since the last three years. The central banks of China and Russia have shifted more to bullion these days.

Exactly! China is most likely buying gold or gold mine shares as Warren Buffet does. I am surprised China still held so many US treasury bonds after USA showed as so unreliable partner over last few years. Well at least the were not increasing the amount as they did in years before.

Serco

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Quote from: avikz on September 04, 2020, 01:43:24 AM

The world trade is still dominated by US and its allies, so if China tries to do something drastic, it will harm the Chinese businesses only. Not immediately but in long run! China is now considered as biggest threat to the world peace.

is it the chinese way to beat US as biggest country in the world. they started economic war to US and continue previous conflict.USA should worry with china condition in few year ago, they show good growth in any field especially in economic and military side. many strategy issued to hold china growth. but no one could do this.

jaysabi

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China is becoming more and more irrelevant because the Fed will buy as many treasuries as is necessary now. Whether or not that will lead to the rampant inflation everyone soon and gloom’s about is yet to be seen. It hasn’t so far after all.

Personal note, posting in all caps makes you look like a loony, not someone to be taken seriously about anything. Are you the person who runs that forex twitter? Cuz every tweet is written in all caps as well.

audaciousbeing

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Quote from: davis196 on September 04, 2020, 03:00:04 AM

Quote from: avikz on September 04, 2020, 01:43:24 AM

Good! This won't affect US economy much but this way China will slowly be cut out of the world under the current rule of the dictator leader Xi Zinping. Since last couple of years, China has been showing its ugly face to the rest of the world through. All its neighboring countries like Hong Kong, Taiwan, India are facing the heat of such nasty mentality of China and now the world is fighting back. From trade freezing to Chinese application ban, world is slowly taking measures to curb Chinese expansionist mentality.

The world trade is still dominated by US and its allies, so if China tries to do something drastic, it will harm the Chinese businesses only. Not immediately but in long run! China is now considered as biggest threat to the world peace.

Don't be so sure about that.If Joe Biden becomes president,the relations between USA and China might change.Biden will try to stop the trade war and end the "cold war" that was started by Trump.
China will sell US government bonds for 200 billion dollars and invest those billions in it's own economy,I guess,which isn't that bad for Xi Jinping.The Chinese want to be more independent from the US dollar and from their giant export of goods and services towards the USA,so that's why they will try to increase their export to other countries and focus on increasing their domestic consumption of goods and services.

One thing of note is that whatever decision each country is taking in this trade war, there is nothing permanent whatsoever. The same government that would probably swore that they will not have anything to do with a particular country or tribe will still call them to a round table discussion when things change or when another party with different ideology takes over.

My concern is the number of people that would be burnt because of these decisions among countries and nothing will be done to make them whole even when the table turns. So, if China should reduce the holding of US treasury, its just sending a message that we could crash it if we wanted to, it depends on the level of cushions that they themselves have put in place.

bryant.coleman

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Interest rate yield for the United States treasury bond has gone well below the inflation levels for USD. So holding these bonds can actually result in a net loss for the investor. Gold has proved to be a much better alternative, and it's price has increased by more than 60% since the last three years. The central banks of China and Russia have shifted more to bullion these days.

davis196

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Quote from: avikz on September 04, 2020, 01:43:24 AM

Good! This won't affect US economy much but this way China will slowly be cut out of the world under the current rule of the dictator leader Xi Zinping. Since last couple of years, China has been showing its ugly face to the rest of the world through. All its neighboring countries like Hong Kong, Taiwan, India are facing the heat of such nasty mentality of China and now the world is fighting back. From trade freezing to Chinese application ban, world is slowly taking measures to curb Chinese expansionist mentality.

The world trade is still dominated by US and its allies, so if China tries to do something drastic, it will harm the Chinese businesses only. Not immediately but in long run! China is now considered as biggest threat to the world peace.

Don't be so sure about that.If Joe Biden becomes president,the relations between USA and China might change.Biden will try to stop the trade war and end the "cold war" that was started by Trump.
China will sell US government bonds for 200 billion dollars and invest those billions in it's own economy,I guess,which isn't that bad for Xi Jinping.The Chinese want to be more independent from the US dollar and from their giant export of goods and services towards the USA,so that's why they will try to increase their export to other countries and focus on increasing their domestic consumption of goods and services.

avikz

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Good! This won't affect US economy much but this way China will slowly be cut out of the world under the current rule of the dictator leader Xi Zinping. Since last couple of years, China has been showing its ugly face to the rest of the world through. All its neighboring countries like Hong Kong, Taiwan, India are facing the heat of such nasty mentality of China and now the world is fighting back. From trade freezing to Chinese application ban, world is slowly taking measures to curb Chinese expansionist mentality.

The world trade is still dominated by US and its allies, so if China tries to do something drastic, it will harm the Chinese businesses only. Not immediately but in long run! China is now considered as biggest threat to the world peace.

StonksStonksStonks

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CHINA WILL FURTHER CUT HOLDINGS OF U.S TREASURIES FROM CURRENT LEVEL ABOVE $1 TRILLION TO ABOUT $800 BILLION - STATE MEDIA

source https://twitter.com/Fxhedgers/status/1301603409817030656

Topic: CHINA WILL CUT HOLDINGS OF U.S TREAS FROM CURRENT ABOVE $1T TO ABOUT $800B - page 2. (Read 324 times)