China's dumping of the dollar has begun

[The Northerner]

China, once a proud holder of United States post-World War II debt, is getting scared.

For years the People's Republic has bought U.S. Treasuries, eventually becoming the largest holder of U.S. debt ($799 BILLION to be exact!). Those days are long gone, though.

During 2009, China hasn't been buying many Treasuries and has been unloading dollars in a way that makes Geithner shiver at night.

And other big U.S. debt carriers like Japan may follow suit if confidence is lost.

This presentation, courtesy of RBS, takes a deeper look into China's holdings and associated volumes since 2005. Get ready for shock and awe.

Source: http://www.businessinsider.com/china-is-unloading-us-dollars-rapidly-2009-12

(Presentation included)

[lapfog_1]

1. Maybe it's a good thing.

This whole house of cards needs to come down... so we can build a new foundation.

Means we will be without a house for a while, all the more motivation to build quickly.

[Goldstein1984]

3. House of cards is an apt metaphor for the situation...

Economics
Environment
Domestic Politics
Geopolitics
Military
Culturally
Energy
Civil liberties and human rights

[eleny]

2. Their citizens won't like it when we can't buy their goods and put them out of work

Those fireworks ought to be spectacular.

[tabatha]

4. During the Bush years, there were some Republicans

who did not even know what was going on and thought that the tax cuts were good.

[roamer65]

5. The Fed will just monetize the Treasuries China holds.

The Fed has already monetized nearly $2T in assorted bad paper so another $800B isn't gonna matter much.

[A HERETIC I AM]

6. How? n/t

[Po_d Mainiac]

7. The largest holder of US debt is not China

The Federal Reserve and US Intragovernmental Holdings have the lead there. Mutual funds are second. China is the largest foreign holder, but number three overall.