China cuts [US-] Treasury holdings

[strizi64]

China cuts Treasury holdings -report

By CBS MarketWatch
Nov. 25, 2004

TOKYO (CBS.MW) -- China has cut the size of its U.S. Treasury bond holdings in its foreign exchange reserves to $180 billion to avoid losses from a weakening dollar, according to a published report.

A report in the Shanghai-based China Business News cited Yu Yongding, a member of the monetary policy committee under the central bank, according to AFX-Asia.

The report did not say how much of a reduction in Treasury debt the cut represented. The central bank normally does not disclose the composition of its foreign exchange holdings.

Yu, speaking at a seminar given at Shanghai University of Finance & Economics, was quoted as saying that China has cut the portion of U.S. dollar-denominated assets as part of its foreign exchange reserves. He said this was largely a reduction in Treasury debt.

The report quoted an unidentified source as saying that U.S. dollar-denominated assets have in the past accounted for about 80 percent of China's foreign exchange reserves. Most of the U.S. dollar assets were Treasury bonds or bills.

China's foreign exchange reserves stood at $514.5 billion at the end of September

http://cbs.marketwatch.com/news/story.asp?guid=%7BBFCC42B4%2D4153%2D484D%2D988B%2D2CDBE10A9415%7D&siteid=mktw

Good-bye $$$.......

[BadGimp]

1. how scarry is this?

Seriously - anyone know?

thx

[oldhat]

7. Bad sign.

But it's not the end of the world. China and Japan cashing in their bonds had to happen sooner or later.

Please don't believe everything you hear on DU. It's sort of a Mickey Mouse/peanut gallery operation.

[nadinbrzezinski]

14. Bad sign

If this is followed by Japan and Europe dumping T-Bills, what follows US dumping T-Bills? Oh did two weeks ago...

It is a very bad sign... we are one step away from Euro reserves and the US Dollar going into free fall... as well as increased inflation and interest rates and that is not accounting the rest of the shit

First big piece of advise, you have ANY debt, PAY IT OFF NOW!

[RedCon1]

20. Pay off your debt?

That's always sound advice; however, it is always easier said than done as well. I am glad I opted to rent though. I saw these interest rates coming years ago. A house is only an asset if it's paid for AND you can sell it to someone else. Otherwise, it's a liability. The Death Merchants have four more years to do what they do best (and what they do ain't pretty). People will be lining up for our "unique" export items before this is all over. Hopefully, that will provide the economic stimulus we need to turn this ailing economy around but, for now, nobody else seems to want to play our game. Perhaps they haven't been properly motivated.

[nadinbrzezinski]

26. I know it is easier said than done

but 1929 will look like a walk in the park compared to what is coming... because of the high reliance on plastic.

It is not going to be pretty, that said, this will be the impetus this country needs to change, it is the kind of shock

What can I say, we may even see a civil war before this is over and done with... err I mean a shooting civil war

[RedCon1]

36. do you think

that the downtrodden dollar could hurt foreign exporters bad enough to get them to stop selling us stuff? I would enjoy that personally.

[TrustingDog]

33. we live in interesting times like none other before.

[shraby]

2. This doesn't bode well.

[oldhat]

3. Fuck.

Here come the speculators.

[Yavin4]

4. Ruh-Ro Shaggy!

Don't worry. Jesus will buy up our debt.

[Birthmark]

5. I'll tell you my immediate reaction upon reading your post.

Ohhhh shit.

[The Zanti Regent]

6. More! More! More!

Good, let's see the asssholes at the Presidential Prayer Team pray their way out of this!

[Yavin4]

8. I Hear Jesus Is Switching To Euros

Jesus is a savvy investor.

[nadinbrzezinski]

16. And gold just beware of currency controls

I hear not even jesus can get around them....

[Cobalt Violet]

9. Does this mean others will fallow?

Is this the economic Armageddon ?

[cavanaghjam]

10. This is big news

and inevitable. China is a close second to Japan in treasury debt ownership. U.S. will have to raise interest rates faster than it wanted to in order to attract investment. Even that may not stem the emigration of foreign countries from the T-Bill window. This might even lead to an abandonment of the dollar as global currency if Japan and Europe begin to doubt the viability of America as a stable economic entity. No doubt the higher interest rates will be a drag on the economy and a cause of numerous personal bankruptcies for people living on plastic.

[Erika]

11. We tried to warn of other countries owning us

through Bush's huge deficits and foreign borrowing. Bush just pretended the problem didn't exist and the uninformed Bushies bought it. Now we're having to pay for their gross stupidity.

[nadinbrzezinski]

12. Batten down the hatches

here comes the major economic hurricane

Short term... could mean a rush on teh treasury...

Ok what can I say? Them interest rates are gona go through the roof!

[BikeWriter]

13. Aww #### I've been warning my forum this would happen for two years! n/t

[Zynx]

15. If this article is right - MASSIVE DUMP

>>TOKYO (CBS.MW) -- China has cut the size of its U.S. Treasury bond holdings in its foreign exchange reserves to $180 billion to avoid losses from a weakening dollar, according to a published report.

A report in the Shanghai-based China Business News cited Yu Yongding, a member of the monetary policy committee under the central bank, according to AFX-Asia.

The report did not say how much of a reduction in Treasury debt the cut represented. The central bank normally does not disclose the composition of its foreign exchange holdings.

Yu, speaking at a seminar given at Shanghai University of Finance & Economics, was quoted as saying that China has cut the portion of U.S. dollar-denominated assets as part of its foreign exchange reserves. He said this was largely a reduction in Treasury debt.

The report quoted an unidentified source as saying that U.S. dollar-denominated assets have in the past accounted for about 80 percent of China's foreign exchange reserves. Most of the U.S. dollar assets were Treasury bonds or bills.

China's foreign exchange reserves stood at $514.5 billion at the end of September

.8 x 514.5= 411.6

411.6 - 180 = 231.6

Did China just dump $231.6 billion??

[The Zanti Regent]

17. Wouldn't you?

If you think dumping $231.6 billion is bad now, watch and see what's dumped when the Nazi Party passes their 27% sales tax and gives FURTHER tax cuts to the rich!

$231.6 billion will be JUST a F'n drop in the bucket!

[nadinbrzezinski]

18. Ok how many Euros, dollar will be worthless soon

do you want to bet the Japanese Central Bank and the Moscow Central Bank follow suitin the next 72 hours, MAX

Tomorrow will be amusing

[mmonk]

24. I thought Moscow had already started

moving from dollars to euros.

[nadinbrzezinski]

27. They hinted they wer egoing that way

they are not going to suport the dollar, and they are now going to make that official policy... how long until japan plays?

[lovuian]

19. Houston we have a Problem!!!

:bounce:

[lindashaw]

21. Dollar recovers on denial China cutting US treasuries

The China Business News, a Shanghai-based newspaper launched recently by some of China’s biggest media groups, quoted Yu Yongding, a member of the central bank’s advisory monetary policy committee, as saying Beijing had cut the proportion of foreign exchange reserves held in dollars.

China Business News quoted Prof Yu as “revealing” that the rate of increase of holdings of US government bonds had fallen and total holdings were currently around US$180bn.

Prof Yu, a respected professor of economics, said he had merely quoted statistics from the US Federal Reserve supplied to him by friends at a foreign investment bank.

Statistics on the US Treasury Department’s website show mainland Chinese holdings of treasury securities totalled US$174.7bn at the end of September, up from US$172.3bn at the end of August.

Meanwhile China’s foreign exchange reserves rose from US$496.2bn to US$514.5bn, suggesting a fall in the proportion of reserves held in treasury bonds

http://news.ft.com/cms/s/ee5882b2-3f82-11d9-bd0e-00000e2511c8.html

[Capt_Nemo]

23. Denial my butt! This was a shot across the bow!

americans, you better behave!

[mulethree]

29. Statistics on the US Treasury Department’s website

http://www.ustreas.gov/tic/mfh.txt

I wonder who owns those "Caribbean Banking Centers" bonds? They've been buying a lot.

"all others" is pretty big too.

[RedCon1]

37. That was an interesting site

Japan has certainly done their part to keep us afloat over the past year or so, haven't they? Do you have the link to the homepage by any chance?

[mulethree]

39. look at the slashes "/"

http://www.ustreas.gov/tic/mfh.txt

erase from the right to the last slash
http://www.ustreas.gov/tic
Treasury Intl Capital page

erase some more
http://www.ustreas.gov
Dept of the Treasury homepage

Sometimes you will get something like "you don't have permission to see this directory " or such. Just erase some more to the next slash.

If you don't see this URL or web address then try right-click on your browser's toolbar and turn on "address bar".

[BrightKnight]

35. This will hurt the US equity market.

I know of a number of people that have transferred their retirement accounts to international funds. Foreign investors are going to be less likely to invest here. If the dollar continues to drop things could get really ugly.

I do not understand why big business was so anxious to back the neo-con chimps. Good government is good for business, investors, and citizens.

[RedCon1]

38. "Good government is good for business, investors, and citizens."

I argued with A PhD economist about this. According to her, the President has nothing to do with the economy, it's affected by forces beyond the president's control; however, I believe that the economy is a product of faith. People take it on faith that a country/currency is a good investment. Anything that shakes that faith is going to be bad for business and, thus, the economy. I hate to say it but, if we could pull off a major win in Iraq, it might restore the shaken faith. It also might lower the cost of energy which will have a profoundly positive effect on the economy. If we can't win, we will have to drag as much of the world down with us as possible...and we will do just that. Personally, I think now that the election is over, for this reason, we should start supporting the war effort a little more. A quick decisive win in Iraq is far preferable to the alternatives.

[BrightKnight]

41. The president can undermine confidence.

Everyone wants the Iraq problem resolved quickly and favorably. The administration has been given Carte blanche to deal with the situation. Unfortunately there is no quick fix to the problem. The stakes are high and the administration has consistently made very bad decisions. He went into Iraq reap the political rewards of a quick feel good victory. He also wanted to reward his buddies with government contracts and Iraqi oil money. That is what they planned for. They did not plan to win the peace.

If our hope for economic recovery relies on a quick and favorable solution to the Iraq problem I fear that we are in serious trouble.

The president can do a great deal to undermine confidence. I remember that he took some heat for talking down the market before he started his first term. I guess he wanted to get the recession started early so that he would not have to take credit for it. He is not capable of inspiring confidence in anyone that doesn't belong to the flat earth society.

[RedCon1]

43. When confronted with a failing economy

All we ever here from GW is "we need to make America the best place in the world to do business." This is kind of a "code phrase" which translates as, "we need to keep lowering taxes until business don't have to spend a dime." In my book, he is justifying his takes cuts as being good for America based on the idea that they will stimulate investment and growth. He has four years to prove his economic philosphy as right. At the end of that four years, if the economy has not improved measurably (for the majority of Americans that is)or, more likely, if it has continued to spiral into recession, we will finally be able to put an end to any notions that Reagonomics works. He won't have Clinton to blame in four years. If he fails to get Iraq under control, he will have nobody but himself to blame either.

[modrepub]

45. What?

I don't wish any more suffering over there but there is no way in hell *s going to stop with Iraq. Anyone who wants to pull their head out of the sand can see whole process is aimed at Iran. The US has it surrounded and its next on the target list. The problem is this guy can't take on a project without totally F-ing it up. I don't consider the work in Afghanistan, Pakistan or Iraq a success by any means. The rest of the world has to decide if it wants to play with this guy any more. The financing is their only way to bring the US under control. They hold the key to our "success" not *, DICK, Condi or Rummy.

[RedCon1]

46. For starters,

I didn't quite understand the first sentence of your reply to my statement. I think if you re-read it, you'll understand. It's, therefore, difficult to reply in kind. I get the impression that you're not pleased with the way things are going in the middle-east. That's understandable. This is ugly business we're conducting in the first place and Bush's had ling of it hasn't made it any prettier. There is, however, a method to his madness. As far as the rest of the world is concerned, I am getting the impression that they aren't going to have a choice in whether they play our game or not for much longer. It will be an interesting four years.

[Spazito]

22. Interesting!

Thanks for the link.

[indepat]

25. A foretaste of the 90%-certain economic Armageddon awaiting America

some sunny day?

[fedsron2us]

28. This is bad news for the US government budget deficit

but the article does make clear whether China has moved the money from these sales into non dollar denominated assets. If they had made this move I would have expected the dollar to have fallen a lot further and a lot faster than we have seen so far. Someone out there in the world must still have a huge exposure to the US currency. If it is not China then who is holding the bag ?

[Spazito]

40. Japan is the States biggest 'customer' and is still trying to prop up

the dollar. One has to wonder how long they will continue to do so.

[Just Me]

30. Awww,...now, c'mon,...they haven't cut-n-run, yet.

They prolly wanna squeeze every drop, for what it's worth, of the Bush Beet policy.

Doncha' think? :bounce:

[ally_sc]

31. Well It has already started...

it is going to get worse..brace yourself..ugh!

[ally_sc]

32. ugh...

more to be concerned over.

[Ima]

34. Just maybe

Castro was pretty smart. He dumped the dollar for the euro, a couple of months ago. He probably saw this coming.

[bushnboots]

42. U.S. economic meltdown

U.S. economy could not handle a global pullback on purchases of Treasury bonds. Talk about a meltdown...

[VegasWolf]

44. We're fucked!! We're fucked!!! The US will finally get to experience

the standard of living enjoyed by all failing colonializers.

[RedCon1]

47. Adapt or die n/t

[struggle4progress]

48. King George Introduces the Faith-Based Economy. eom