Everyone please, stop the madness !
I don't wanna see any more posts (probably americans) with people saying saying China wants to see the USD go down.
This is outright wrong, you need to stop reading this Wall observer and go read the newspapers first.
China is the absolute #1 investor in USD. Get your facts straight.
I don't wanna see any more posts (probably americans) with people saying saying China wants to see the USD go down.
This is outright wrong, you need to stop reading this Wall observer and go read the newspapers first.
China is the absolute #1 investor in USD. Get your facts straight.
Well, since you apparently have your facts straight, please point me to a source that verifies you claim that "China is the absolute #1 investor in USD".
They do own many billions worth of our bonds.
Yup, pretty much. It has been extremely conductive for their exporting strategy.
Quote
China is by far the largest foreign holder of U.S. Treasury securities. At the end of July, the last month for which official statistics are available, it had stockpiled $1.2773 trillion in Treasuries. The country is way in front of second-place Japan, whose portfolio was $141.9 billion smaller. If you add in the Treasuries of autonomous Hong Kong, the hoard of the People’s Republic increases by $120.0 billion.
Source: http://www.forbes.com/sites/gordonchang/2013/10/06/what-if-china-stops-buying-u-s-government-debt/
FWIW though, in the last few weeks, this strategy appears to be shifting, but still, they hold most of the treasuries.
Largest foreign holder != #1 investor
The Fed and US citizens hold most of the treasuries. How can you quote $1.3 trillion and then claim that is "most of the treasuries" when US debt is north of $16 trillion? It looks like <10% from here.
Seems like you are wanting to discuss semantics to intentionally miss the point.
The point is actually pretty simple: If the USD were to go down tomorrow, China's economy and CNY would be among the most affected, if not the most.
Remember also that they thrive on exports. Unless you count the 28 countries in the EU as a whole, the US is their biggest buyer.
The depreciation of the USD is not in their best interest right now.
You can not sustain an economic strategy completely oriented to being a cheap exporter when you're suddenly not cheap anymore.
Very long-term might be different, as I said above, they seem to be starting to shift their US bond holding to Gold and other assets.
