China Dumps 97% of its US Treasury Holdings

[AgeOfEnlightenmentSCP]

MELTDOWN continues unabated...

From the goofy right wing report of the United States Treasury.

China has dropped 97 percent of its holdings in U.S. Treasury bills, decreasing its ownership of the short-term U.S. government securities from a peak of $210.4 billion in May 2009 to $5.69 billion in March 2011, the most recent month reported by the U.S. Treasury.

www.treasury.gov/resource-center/data-chart-center/tic/Documents/lb_41408.txt

(Column 9)

Until October, the Chinese were generally making up for their decreasing holdings in Treasury bills by increasing their holdings of longer-term U.S. Treasury securities. Thus, until October, China’s overall holdings of U.S. debt continued to increase.

Since October, however, China has also started to divest from longer-term U.S. Treasury securities. Thus, as reported by the Treasury Department, China’s ownership of the U.S. national debt has decreased in each of the last five months on record, including November, December, January, February and March.

www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt

[deziloooooo]

Not being that knowlegable in these things , admittingly, would this decreased investment in US securities, short, long, possble be attributed to the possibility of US going into a default mold, if debt cealing problem not resolved?

[❤ mollymouser ❤]

So ... what does this mean for the U.S.?

[Deleted]

Seems no one on either board has much to say about it. I usually don't understand what money people talk about even if they explain it. Maybe someone can explain it in layman's terms. Sounds bad.

[AgeOfEnlightenmentSCP]

It means we've maxed out the credit card. Our current largest creditor no longer wants to loan money to us, and that very likely means nobody else is going to loan us money, either.

[formerexpat]

China has dropped 97 percent of its holdings in U.S. Treasury bills, decreasing its ownership of the short-term U.S. government securities from a peak of $210.4 billion in May 2009 to $5.69 billion in March 2011, the most recent month reported by the U.S. Treasury.

A bit misleading in the title, Paul, don't you think? ST holdings decrease while overall holdings increased significantly; by some 70+%. That means we're trading short term debt for long term debt, and in most cases, very long term. That's great for the US [only from the exchange of debt perspective, not the over spending problem we have in DC]; there is less interest rate risk to worry about going forward.

Overall money has decreased for the past 2+ years. China has increased it's holdings in the US, both in currency and debt. China is now much less diversified than it was pre-2008. Between that and getting killed on fx losses on a depreciating dollar, that's why you're seeing China move away from the USD some recently.

When countries and investors are looking for safer government securities, the US will be amongst the top on the list.

[Aman A.K.A. Ahamburger]

I'll make a rare appearance on here just because this is quite the backhanded move there toughtimes and I am bored and lurking on a Sunday, if you want to continue this conversation, you know where to find me... You could have simply asked if you didn't understand, formerexpat has it 110% correct, and like I said China wanted everyone to think they were getting out of debt, however.

China Owns Nearly $270 Billion More In US Debt Than Previously Estimated
www.davemanuel.com/2011/03/01/suprise-china-actually-owns-116-trillion-of-us-debt/

AKA. China has hitched its wagon directly to the USA starts and stripes. Listen to your elders patstab is correct! k4u patstab

[marshabar1]

Jun 5, 2011 13:23:24 GMT -5 AgeOfEnlightenmentSCP said:

It means we've maxed out the credit card. Our current largest creditor no longer wants to loan money to us, and that very likely means nobody else is going to loan us money, either.

How on earth will Obama's puppet masters fund their fundamental transformation of the United States into a third world hell hole??

If they don't have any money for socialistic government programs the population will be left to our own devices!!!

You know what THAT means!!!



The progressive's worst nightmare. . . self-sufficiency.

[marshabar1]

That IS ironic. But still. . . it's not a group of automatons gazing into the rising sun or anything..

The 50 Year Strategy: A New Progressive Era (No, Really!)

motherjones.com/politics/2007/10/50-year-strategy-new-progressive-era-no-really

[fairlycrazy23]

There is still Uncle Fed to buy debt. I think they have been the biggest buyer of late anyway, outstripping China or anybody else.

[formerexpat]

But all we want to do is cut the weakest and poorest, not where it would really help. It's tokenism and letting the rich get richer.

sociology.ucsc.edu/whorulesamerica/power/wealth.html

wealth by percentile: 1983, 2007

top 1% - 33.8%, 34.6%
next 19% - 47.5%, 50.5%
bottom 80% - 18.7%, 15.0%

I'm pretty sure that you're in that next 19%, Patstab so you're the rich that has gotten richer in the past 30 years.

The lowest point for wealth concentration of the top 1% was just under 20% in 1976. The bottom 99% had 80% of the wealth at that time and just under 80% in 1979.

Those must have been great times for the "poor"...can you tell me how great those times were?

[lakhota]

It means China is concerned U.S. may not raise Debt Ceiling.

China Reduces U.S. Treasury Holdings as Debt Ceiling Debated

www.businessweek.com/news/2011-05-17/china-reduces-u-s-treasury-holdings-as-debt-ceiling-debated.html

[Value Buy]

What does it mean?
Not too much.
They are not making enough money on their investment, would be one reason.
Someone is still buying them. There are no shortage of buyers.

[lakhota]

I can't believe it took 19 replies before anyone mentioned the obvious reason - DEBT CEILING.

[cereb]

Jun 5, 2011 14:28:07 GMT -5 formerexpat said:

China has dropped 97 percent of its holdings in U.S. Treasury bills, decreasing its ownership of the short-term U.S. government securities from a peak of $210.4 billion in May 2009 to $5.69 billion in March 2011, the most recent month reported by the U.S. Treasury.

A bit misleading in the title, Paul, don't you think? ST holdings decrease while overall holdings increased significantly; by some 70+%. That means we're trading short term debt for long term debt, and in most cases, very long term. That's great for the US [only from the exchange of debt perspective, not the over spending problem we have in DC]; there is less interest rate risk to worry about going forward.

Overall money has decreased for the past 2+ years. China has increased it's holdings in the US, both in currency and debt. China is now much less diversified than it was pre-2008. Between that and getting killed on fx losses on a depreciating dollar, that's why you're seeing China move away from the USD some recently.

When countries and investors are looking for safer government securities, the US will be amongst the top on the list.

SHHHHhhhhhhh! Don't say those things to loudly, you will put a big damper on "The sky is falling Sunday evening soiree"....

[❤ mollymouser ❤]

Jun 5, 2011 13:23:24 GMT -5 AgeOfEnlightenmentSCP said:

It means we've maxed out the credit card. Our current largest creditor no longer wants to loan money to us, and that very likely means nobody else is going to loan us money, either.

Good explanation ... thanks.

[Deleted]

Apparently, it matters which board you put it in. The market one is not the place to be. At any rate, I wonder why this isn't bigger news.

Because a lot of people saw it coming?

[ugonow]

....A few years ago everyone warning of the dangers of China holding so many of our notes....

[fairlycrazy23]

I think the reason they got rid of these was they could actually find buyers for the short term notes.

I don't think it has much to do with the debt ceiling, but the long term outlook of the US that they are worried about. We are already there largest trading partner they may think it is very dangerous to have some many eggs in one basket.
Of course since we buy Chinese stuff in US dollars, the Chinese have to use these dollars for something (like buying Treasuries)

[Value Buy]

Okay, we are selling 66 billion in notes this week. Wanna bet it is a sell out?

[Deleted]

China Dumps 97% of its US Treasury Holdings

I "think" that I said in a post about 6 months ago that this was going to happen. (I know that I talked about it with the wife). That's because I would have done something similar if I were holding a bunch of debt of someone I didn't like. It's a great way to screw someone. Good move on China's part & you can't really blame them, after all we set ourselves up for it by spending more than we took in for so many years.

[Driftr]

Jun 6, 2011 21:24:19 GMT -5 Value Buy said:

Okay, we are selling 66 billion in notes this week. Wanna bet it is a sell out?

Sure they'll all sell. They'll all sell well beyond when QE2 stops too. They'll all sell right up until one or more of the Primary Dealers that promise to buy as last resort goes under. After that? QE3? Probably QE3 before we get to any PD headaches. Certainly stealth QE with maturing currently owned Treasuries except if I remember correctly there aren't a whole lot of those maturing in the next year. Should make for an interesting summer to say the least.

The way I see this is the Chinese have looked into our future and seen that there is no way our country can handle any kind of rate increase for many many years. They've decided to move their short term holdings to long term because they're sick of the yield they were getting on <1yr and we're still one of the safest bets in an unsafe world. Perhaps they see a global recession brewing? Or should I say recognition of the current global recession that is only currently being papered over by Governments pulling forward more and more demand via deficit spending?

[maui1]

china's toughest decision was/is not to get out of dollar investments, it was/is how best to do it without taking to much of of hit, in doing so.

would you invest your cash with a counterfeiter? i am not saying china is any better, but would you?