Is China selling off its US Treasury and dollar bonds? It's complicated.
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- Опубліковано 21 бер 2024
- A deep analysis of China's US dollar reserve holdings reveals that their total reserves are basically unchanged over the past 10 years.
However, China regulators are moving reserves from US custodians to European ones, and are increasing their purchases of Agencies, such as Fannie Mae and Freddie Mac.
The change in custodial arrangements has profound implications for China's political risk management. What's more, it enables their SAFE officials to obscure their central banking operations abroad.
Their investment shift from Treasury paper to Agencies means they will be picking up extra interest income totaling hundreds of millions of dollars annually. Surprisingly, risk profiles for these assets are falling, despite aggressive Federal Reserve tightening.
Sources and links:
Reserve holdings changes
markets.businessinsider.com/n...
China isn't shifting out of dollars, or dollar bonds
www.cfr.org/blog/china-isnt-s...
Agency bonds definitions and applications for investors
www.schwab.com/learn/story/us...
China's rising holdings of US Agency bonds
www.cfr.org/blog/chinas-risin...
Fact sheets, Federal National Mortgage Association loans yourhome.fanniemae.com/buy/yo...
Biggest bailout in history FNMA and Freddie financialservices.house.gov/n...
Lead headline, "Where have all the foreign buyers gone for US Treasury Debt?"--Wall Street Journal
www.wsj.com/finance/investing...
Charting the fastest interest rate hikes
www.visualcapitalist.com/inte...
Current 30 year mortgage rates
www.statista.com/chart/27413/...
Record lows for mortgage delinquency
newslink.mba.org/mba-newslink... - Наука та технологія
7:28 USA is angry at BRI because of this - $1T spent on BRI, instead of going back into USA politician's pockets.
The developing nations deserve the $1 trillion more, esp when those politicians are banning TikTok, and other Chinese products.
Nah
BRI are just China's bad use of profits China used to make from export manufacturing goods sold to the US.
But now both the US and much of the rest of the world isn't buying and China's BRI loans aren't being repaid putting China in a bind.
Nop they are mad because that money is being put on some better use to challenge the influence of America. American elites by nature are Narcissistic. They don’t want to see any other but their ‘own’ on the table. It’s that simple. Indians have no self respect they can even clean the table for them, but Chinese and Russian would never do that. It’s that simple.
Something the U.S would never had done or interested in doing so they should let China be.
😊
I find it hard to believe that Europe is not sharing the data with the US
I agree, the E.U. is likelynto share data with their master or else? 😂😂 The Chinese are screwed, if I have to advise them, I say gst out of Dollars and invest in Yuan or Rubles.
EU is practically under the U$ thumb!
EU can't take a piss without U$ say so.
U$ and U$ govt can't take a piss without A!PAC or ISR say so, it is so blatantly obvious, which is why ISR can get away with ge no side.
If you read the two articles by CFR, and think about it a bit what CFR means in the political arena in the US and in the World, would anyone really believe that Europe is not sharing every bit of data with its master in the DC? From where would CFR have gotten hold of all the tips and points in the two articles by CFR?
Europe also doesn't trust the US
Why would they?
Just think
You can be emotionally faithful to a team or you can be emotionally faithful to the sport. If you choose the team you will get good and bad emotions, if your team lose at the beginning of the long competition you are done for the season.
Be faithful to the sport you will get some bad moments but there is another day, another game, you can have favourites but it might bum you, but that's it, next game next high.
If Europe is about the team they have a lot to lose, if they learn all teams have potential and enjoy the game, they won't lose so much.
That's the difference of the Global South. Even with their differences, the sport is more important than the teams playing it.
"There's one overriding fact. The entire financial system of the Western world is in private unelected unaccountable hands, the hands of people who meet in absolute secrecy. The Bank for International Settlements (BIS) every four five six weeks has a meeting of the top governors of the banks, and they meet in absolute secrecy. And they have the big banking families and so forth, they all meet up. The 'minutes' are never made available and they decide on the money creation and the money supply of the world. But none of us are allowed to know anything about it." ~Justin Walker, 03/20/2023
Precisely. The beauty of “zero” oversight and transparency. They do not have to account to anyone except themselves and when the bubble implodes the working class will suffer.
It seems to have worked for about seven decades now, so... Transparency is another word for lobby group interference and therefore oligarchy. I don't imagine the central bank will consult me, or you. And my vote does sweet FA. The CCP announces its strategies once they're developed - whether that's a move West, to infrastructure, or to tech - and businesses can know what government support to expect. I know which one I'd prefer.
The big hedge funds are buying up homes by the tens of thousands with trillions of cash sitting on the sidelines (not commercial real estate). That’s why housing prices have not dropped as expected.
Inflation is primarily being caused by massive increase in government spending and borrowing, not by low interest rates.
Much longer than 70 years now. The Federal Reserve was created in 1913 unless you are alluding to the Breton Woods Agreement instituted at the end of WW2? Too much authority residing with a single entity, imo.
Remember to cast your ballot this Fall, at least the only democratic right left to exercise in the (mis)perception of Amerikans to alter the course/future outlook.
The bulk of Russia's reserves are in Europe, not the US. Russia started divesting from the US in 2014 after the sanctions. Russia mistakenly thought Europe would be safe. USD 230bn in Europe, USD 47bn in UK, USD 67bn in the US
There is nowhere safe in US or EU. Safest bet is keep your county's asset in the form of gold in your own country.
@@mejust8392that is exactly what China is doing being last year biggest gold buyer.
@@deepone5005a drop in the bucket.😄
@@mejust8392 That is why the gold price is on history high now :)
Whoever this Chinese economist they are extremely smart, this diversion didn’t happen a year until US NATO sanctioned Russia for 2014 maidens event. Whoever this Chinese economist person is they see the potential threat already and started the process of diversifying away from direct dollar treasury.
Really? Some Chinese analysts think the policy makers are traitors and American lap dogs. They believe China should withdraw from US bonds long time ago completely and invest in gold, then they can use those gold to couple with Chinese yuan and convince the rest of the world to dedollarize just like Russia did. I have no knowledge in economy or finance tho so I don't know who is right.
they know they are next after russia
Pretty sure it's their plans for decades (they're patient people who always think in 100 years). The Chinese were sanctioned before, I think. I forget when it is in the 60s, 70s or 80s... it's when their country at the poorest and couldn't get anything from aboard (and even Russia also involved in the sanction). Then they offer themselves for foreigners to build factories in their country since they have plenty of people that could be paid cheaply. This is the beginning. Especially when the foreigners made a mistake to hand over the fabrication of their technology to the Chinese for less cost production. Pretty much the same thing as handling over their techs to the CPC.
they not him, in china they work together
@15:00; …”boring”… Ha.
No, your topics and details are NEVER boring.
Yes, but the next 5 times are about to get a lot worse, with that view to the horizon. 😂
In a society that practice meritocracy, it is more likely they have been exceptionally smart rather than lucky. The "Chinese Characteristic" term that is used to described it's political and administrative systems is meritocracy. The Imperial examination since the Sui Dynasty had been in place to select the best brains into civil service. Every parts in the government, except the emperor himself, were technically the best people for the job. Today in communist China, even the emperor is subjected to meritocracy rigor. President Xi came from a humble background and had nothing except a trail of high achievement credentials.
If you thought the last five minutes were boring, the next five minutes will be worse. Love this channel!
Not only China, Japan and UK along with a number of other countries are selling the US Treasury bills/bonds.
I believe Japan is selling treasury bonds for a completely different reason. They have to do so because their interest rates are returning to positive territory. In the past, investors typically borrowed Japanese yen due to the negative interest rates. Now, these investors need to sell their assets to repay the borrowed money and exit Japan, cashing in their profits in USD. As a result, Japanese banks require a large amount of USD. How can they acquire USD quickly? I suppose the only option the banks have is to sell the bonds. That also provides liquidity to the US market, good for the US but not that good for Jap ppl, but I guess Jap gov doesn't care and the normal ppl in that country do not know :)
@@wizardy6267 Great observation! Thx
For an average investor, without any background, you’re showing us good stuff. Get us to figure in all your materials and helpful to our continuing experience.
Appreciate your efforts.
The balance of U.S. Treasurys held by China totalled $805.4 billion in August, down 40% from a decade earlier, according to data from the U.S. Treasury Department as of 4 November 2023
Take a look at China holdings of US Agencies, State and municipal bonds .. You are being misled by vested fake news media. Oh, maybe you want to mislead others for a few $ yourself!?
Data credible? 😂
Chinese leaders are not running a country but a Hedge fund. Respect to them!
Kevin, these videos are far from being boring. They’re highly informative and extremely interesting. Thanks for taking the time to put this together.
What the Chinese Government does back then defies logic thinking,
but one thing for certain is that they predicted the 5% GDP of 2024
back in 2012.
I think during the US election in 2015?, i've heard some US politicians said that the US can simply keep or seized the chinese money (because of unfair trade ...etc) ? That's why they moved the money to Europe ?
How can US government just seize other country’s assets? Is that theft?
but eu froze russian assets. why wouldn't they do it to china
@@user-tg9yo2vo6uif you want nobody to trust your bond that the way 😂
@@user-tg9yo2vo6u EU hasnt been as hostile to China as US
@@FemboyLegendGDPast performance is no guarantee of future return.
The Fannie and Ginny Mae’s are agency obligations - not direct obligations (“full faith and credit”) of the federal government. Prices have always traded at a discount to Treasuries forever. In a crisis, it is not impossible to foresee these (and other) agency bonds abandoned.
In short, nothing is over…until it’s over. There is nothing that the US government will not stoop to try in desperation.
They are one of the last few to few if I am not wrong. Which buys time for China to take actions.
Interesting. This is contrary to mainstream information. Thanks for sharing.
First time on this site. Very good information. Chinese unreported gold reserves is another interesting topic.
Clever monetary system indeed. They flooded the world with US$ so everyone will likely drown with the sinking 🚢. Although there is talk of de-dollarization, it is going to be extremely difficult to transition away from the dollar without enduring severe economic pain.
1 trillion is a bargain in return for value added infrastructure compared to double the amount spent in the Afghanistan war.
Always find your stuff interesting. Glad to see Qingdao is getting some sun and warmer. Great view of the city
This is something I never knew, thanks for sharing it with us. You are the real deal.
Never boring but learning, more power to your channel
In 2015 China understood the further implications on the sanctions imposed on Russia in 2014.
Brilliant, as usual, Mr. Walmsley. 1) You are right. The Chinese got lucky on their de-risking move to agency bonds held by European custodians. They could not have predicted the anomalous failure/refusal of housing bonds to default when interest rates shot up.
On that note, why, unlike during the Great Recession of 2008, are U.S. home owners holding on to U.S. houses that are “under water” vis-a-vis high interest rate mortgages? The answer: They anticipate such stratospheric inflation in the U.S. that they hold onto tangible non-financial assets (houses) as hedges against that inflation in spite of high interest rates.
This is not boring; this is brilliant. Keep it coming.
While the US and EU are currently advocating for decoupling and de-risking, Beijing had already taken these steps many years ago. The only thing that caught Xi by surprise was Trump's initiation of a trade war with China. Fortunately, the pandemic provided China with some respite, buying them valuable time.
but Trump didn't initiate a Trade war. Trump will openly tell you how he still didn't balance and match China's 30 year long Trade Wars attacks. (so, China is still winning BUT its just a bit more even now instead of way lopsided).
I wonder if Chinese demand for Fanny and Freddy’s debt is enough to inflate another housing bubble. Or is that not feasible?
On the danger of asset seizure, I do remember Trump saying something about cancelling Chinese Treasury holdings back in 2018 or so.
Thanks for these videos.
That is cowboy... The inflation alone is already devaluation Money owes to China . Ie, you are paying China much lesser than you borrow fom them, if that is not enought, then how much more do you want.
Excellent. Keep on this most important service. Congratulations!
I think the Chinese leadership (including economic leadership, financial managers and capital allocators) instead of trying to predict the future, dedicated themselves to design it.
I find your video very interesting and easy to understand. Not boring. Thank You!!!
This video is not boring at all . I think its one of the best you have made . Keep up the great work. 👍
Let's be candid - your videos are never boring although much of your information and analysis is beyond my level of experience and education. Despite that limitation, I appreciate your providing and explaining what's what in the great world of commerce and associated finance. Thanks.
Lucky? Two of the three events -seizure and interest rate hikes - were very foreseeable. But thank you for an excellent and thought provoking video.
My own belief is that Russia deliberately left their reserves at risk because if the West seized them it would be immensely damaging but also actually difficult to carry out, as we have seen.
It also masked their intentions in Ukraine.
It's obvious. The Chinese are not only lucky, they also have time machine!
When there is a military conflict between US and China, proxy or not, does it really matter where the custodian of bonds are located, when sanctions are imposed?
As for housing market in the U.S., who are owning a large chunk of single family homes? ¼ is owned by corporates America, 40% by 2040. That’s why defaults are low when interest rates are high.
Yes it matters. China have more leverage over EU than US. and EU is very slow in decision making because they are very divided.
@@skydragon23101979but they still sanctioned Russia and took their money….
@@skydragon23101979china should give them to south america
China made a killing during the 2008 financial crisis, from the two GSEs. Most people think of Jews as savvy in financial dealings, and historians will explain to you how the European Jews were not allowed to have lands and were forced into certain occupations and how they became savvy by engaging in these trades for generations. The Chinese have been doing businesses much longer, the Chinese businessmen didn’t get rich by riding the gravy train of the European colonialists
China saved the US from the 2008 financial crisis.
You always need a certain amount of good luck. You also needs brains and intuition. Go back about 18 years, when Bauxite was worthless, China bought Bauxite mines. When every one gave up on solar panels, China went heavy. China is more often ahead of the game, than behind.
I'm very surprised to hear his comment on the Chinese investment move as being LUCKY. Such sentiment came from the ignorance of the people and the government in general. Luck has little to do with their psyche and tradition. Their state examination to get a gov't job is most difficult and competitive. Their central gov't is not like gov't in the West, so they can think and plan 10 years ahead. The Belt and Road Initiative is an example. The US, on the other hand, can only plan 18 months at best. They have to focus on financing their next campaign after that lest their plans would be dismantled if they lose their election. Also, most public officials in China have been well-trained and experienced in their specialty locally before taking a post in the party. In democratic societies, people vote for the most popular regardless of their experiences.
Amazing stuff!
I appreciate your sharp observation and analysis.
As a small time real estate investor in San Diego I appreciate your thoughts on rising interest rates versus home prices. The fact that you said it's never happened before I have not heard online or on UA-cam from anybody. Keep up the good work bro!
Love your work. Thankyou.
no boring at all, the best channel. I heard you sigh….a lot in your videos.
You're very knowledgeable on this concept. Thank you.
Stop borrowing and start paying it off. But we all know we had no intention to ever do that, don;t we? Indeed it's too simplistic... I know. Anyway thank you for guiding us through the subtleties of these twisted financial manipulations. I had to rewind your video many time because you explain this quite well and I think I'm getting up to speed. Can you explain how Russian's assets interest confiscation can backfire on EU because of Russian lawsuit on Euroclear?
Thank you for your work, sir!
❤❤Kevin, keep the great boring stuff coming… fantastic boring insights. Thank you,🌹🙏🀄️🇺🇸🌹
Very informative . Thanks for sharing .
I disagree. Even if they use European banks as custodian, if the US side confiscate the T bills, European banks will do the same since USD acc of those European banks will also be affected.
China still has a 200 billion plus trade surplus with the USA alone
500 billion plus trade surplus with the rest of the world
A good portion of that has to be USD that they have to do something with those dollars
the 'surplus " only exists because we have off shored our exports. chinese bought around 800 billion in goods from usa companies last year. apple, hilton, mcd, deere, etc. far more than they sold to us.
What most people don’t get?
Is it is US multinationals making the lion share of those profits inflating the trade deficit between China to the USA
Where Chinese companies mostly trade with their Belt and Road country partners these days
These US multinationals are the ones sending you that junk
These US multinationals are still using the same highly polluting labour intensive factories formula.
As they were using more and more illegal labour smuggled in from South East Asia.
Or more and more automation in their wholly owned factories in China these days
These are the same companies who got those trump Corporate tax cuts you for sure cheered about
Same companies based in China who derived 392 billion in sales into the Chinese domestic markets in 2018 when trump started his trade war
Same companies averaging 20 to 40% of their earnings from China whose high flying stocks are in your 401k/Pensions
Same companies who the American farmer and consumer were sacrificed. So the USA could try and get “more” or “better” access for the US multinationals, into those Chinese Domestic markets during the trade war
Same companies whose HQ is in a North American city you can easily go stand outside and protest at….
Why didn’t China pull the nuclear trade option and boot these US companies you might ask?
They don’t believe in a zero sum game type of thinking
As I can show you during the trade war.
China didn’t pull out their big trade weapons, in fact they were lowering tariffs to most countries not raising them
👇
Trump’s ‘trade war’ with China won’t be so easy to win
Having learned these value chain lessons, Beijing has worked hard to bring more of the high-value-adding parts of value chains into China, and to build hi-tech industries in which it can establish a globally competitive position.
China has successfully done this in areas like high-speed trains (CRRC), digital telecoms networks (Huawei), drones (DJI) and hi-tech batteries (BYD).
Trump’s team is not wrong to be worried about China’s competitive emergence here, and to target these new-tech sectors in the latest trade war sortie.
But here’s the problem: China exports almost none of these new-tech products to the US, making US tariff threats meaningless. Rather, they go to developing economy markets - many embraced by the Belt and Road initiative - where China has succeeded in building a hi-tech, high-value brand reputation.
As Trump’s team will quickly learn, the challenge of finding China’s pain points is bigger than expected: for a decade China’s priority has been to base growth on the domestic consumer economy and reduce reliance on the low-value-adding export processing industries (many of which are US- or Hong Kong-owned and concentrated in the Pearl River Delta)
SCMP
SPECIAL REPORT-How smuggled workers power"Made in China"
The smuggling of illegal workers from Vietnam across the 1,400-km (840-mile) border into China is growing. Labour brokers estimate that tens of thousands work at factories in the Pearl River Delta, which abuts Hong Kong. Workers from other Southeast Asian nations are joining them.
Visits by Reuters to a half-dozen factory towns in southern China revealed the employment of illegal workers from Vietnam is widespread, and authorities often turn a blind eye to their presence. Workers from Myanmar and Laos were also discovered to be working in these areas.
Reuters
U.S. companies with China operations look to the Asian giant for growth
U.S. multinationals' majority-owned affiliates in China brought in sales of $392.7 billion in 2018, up 4.8% from a year ago, according to the latest available data from the U.S. Bureau of Economic Analysis.
CNBC
The world have a trade surplus with the US. Why? The US doesn't make anything anymore. It has nothing to trade except some grains, oil, services and technology. China have caught up and even surpass the US right now and it can get the grains from south america. Even if China wants to buy more from the US, the US doesn't have anything to sell. Somebody tell Trump, Biden and american leaders this.
Very interesting. Smart, lucky or both? We mostly don't understand what they are doing now, envious they can and angry they do. I wonder what they are seeing 10 years ahead which I am not seeing. Maybe they did announce what and why they were doing then just as they do now but we don't believe them.
One more thing -- China must keep the US$ high vs the Yuan, to keep Chinese exports cheap.
Thanks for the info . BTW,where did the money come from for the gold purchases?
When the fed is buying to price gets higher and it's time you sell high. When the fed is selling the price gets lower and it's time you buy low.
Hi. Just curious to know. If you don't see them, how do you know that is the case?
(I'm not an economist or a finance guy)
great report 👍
They have many good analysts just like in Three Days of the Condor. There have been many geopolitical events that have enabled them to do meaningful scenario analysis.
Appreciate your analysis..
This video is more nuanced and factual than most "Professional" "Financial" videos churnned out by other nonsense click bait channels.
Hi kevn, this going to be the best investment for china as the housing market is going to boom in next 2 years (as the internet rate comes down) as the big funds are buying all the houses now. The middle class dream of buying the house is over like in HK, Germany ect. If you see the latest budget in uk you can see what the gov is doing to help the rich. In next. 20 years all the home ls will be in the hand of few fund companies as this is the only asset left to be own by them.
Western finance capital will somehow "influence" their own governments to own all the oxygen in the air at some point and we will be forced to pay monthly subscriptions to breath. Watch and see.
In the era of mass hysteria, it s nice to have some one with a clear mind and cared for the data
No exception lucky comes without exception smart!
I’m so lucky to have found this channel. Your analysis is spot on. Thank you for helping me connect the dots as well. Subscribed. We’re in for a ride.
👍great insights, deep into the weeds!
Hi Kevin,.
What economic rule determines how much paper money a country can print?
A foreign entity owning US Treasury bonds is required to pay tax in the US or in its own country?
China holds on to these reserves to balance the accumulated FDI over the years for investors exits. China still holds credibility sacred. While FDI boost production, its Forex Reserves earns interest using the same USD. US reserves also function as a financial nuke option for China. We know US has no credibility but if Luxemburg Exchange ever fails, the whole Western financial system crashes. All FDI gets stuck in China.
Excellent inforrmation
The USA is not able to repay the capital now, and struggles to pay the interest on its huge debt. The fear is that the USA will use inflation by printing paper and electronic money to pay down the debt with worthless currency. This technique was used by Germany to reduce the war debt during the Great Depression, after WW1.
Good stuff 💯
Thanks
Do you have an updated chart of Chinese bond holdings closer to current 2024?
China needs a modern transportation
system. Chinese people prefer a good transportation system to holding USA bonds that devalue everyday.
I wouldn't understand why anyone could be bored with your talks
You have content of 500K subscribers and I wish you to get to even more than 500K, yet I know UA-cam may not promote you because has its own agenda pro-Wall Street. But I am impressed! Looking forward to all your content.
Thanks.
Sir. I work as a red team operator. Clients hire me to work with their red teams to determine whether or not a nation-state adversary could achieve certain objectives. Objectives often include "can you access the Big Boss's email? can you access a specific database or sharepoint? Or gain access to a specific server?" I'm one dude, often acting with others but even solo I am able to achieve these objectives for my clients. Our friends have a battalion of people like me looking after their interests. You ask about foresight, it is easily within the realm of possibility that the people making the decisions there are able read the email and all documents associated with any account at any financial company or organization with whom they do business. To assume otherwise could assume they are illiterate in the use of spies. They are not. They're not playing chess. They're playing go.
US is spending so so much money on the war….
China may have a top secrect group of fortuntellers helping them manage their investment access successfully.
And a magic kristal ball
Nothing is left to chance.
Americans take out 30-year loans, so the rate rise only affects some borrowers.
Russian central bank FX reserves were in the custody of Euroclear which is in Europe, but the US managed to freeze these reserves anyway. So why would choosing an European custodian rather than an American one matter?
Brilliant move. China deserves to be number one.
Putting the money in European banks is just as bad....The best option is still gold...Or non Western currencies...
Bitcoin.
We hope you give actual news for china. Things getting great in China.
china has superb sovereifgn portfolio managers. only gnma s are pass through , i think. not fnma or freddie
It happened when invading countries like iraq and afghanistan, russian oligarchs and the Madjesky Act. It was a step towards the extreme measures the US have taken. Similar when they brought Switerzerland to the new rules of releasing the American Swiss account holders names to the IRS
great info again 🙏 thank you .. lets hope 'world glue gets better not worse '
The currency devaluing risk doesn't change whatever US$ bonds you have. You are only on the right side if your country currency is devaluing more than the US$. Given the size of US debts I don't see any other solution. The US has done this again and again since WW2. The rest of world pays for their debts
Your analyses seem to be more thorough & more deeply explanatory than many others. Narrowly focused statistics can be misleading when there is a bigger picture like changing, and therefore masking, custody of accounts.
Rather than brilliant forecasting, Occam's Razor suggests a simple de-risking strategy that moved eggs to a basket not held under US regulatory & political control. A wise move as the EU started to question over-reliance on US financial markets & government goodwill, especially after the 2008 subprime mortgage/CDO financial collapse.
The big question is: now that we understand Thucydides Trap, is it possible to escape the trap without a disastrous military conflict in an age of nuclear weapons? Can both sides agree to a more level playing field in a multi-polar world? Sharing markets rather than seeking dominance over markets?
All countries have a vested interest in their national industrial policies, the health of their strategic industries, and the employment of their citizens. Winner take all leaves little or nothing on the table for the other guy, and that's when the other guy has nothing left to lose...
Why China didst move all their investments out of US and Europe? Keeping in Europe may not be safe also
Excellent video not boring at all Leaving behind some questions. China have some seriously good Institutional and Personal relations with head of these institutions. For example Schwartz. Also Austin Fitz of solari have mentioned this fact that American financial institutions are underwriting for private and govt investor at unprecedented levels. Levels never seen before. According to your video it appears they have gone discrete and private, maybe they foresaw the sanctions spree against Russian oligarchs ! Who knows ???
The fed will raise interest rate in the next meeting, not cut rate
The biggest market in Europe is the Euro-Dollar market where those outside the USA are able to obtain US Dollars without resorting to the Federal Reserve. Those assets held by China are utterly liquid in this market.
So where is China's gold reserves numbers? China also cant be dumping all its US treasuries, bonds, etc... because u need a buyer. But China can reduce its holding of US bonds and treasuries etc.. of course noone really knows except China. But the point is China is pragmatic in its approach and risk management too has to be factored into this equation and of course what has happened to Russia is a very good lesson for China to understand and prepare for the future.
how was it not foreseeable in 2014. Obama's bailing out the banks and his shift to the Asia Pacific excluding China would have meant that China would look to possible futures. Chinese politicians have a proven track record of management, They are well educated and smart. They look to the long term and not to the next election.
Why would China sell the bonds when selling the bonds in the open market will be a huge lost instead the reduction could be due to bond maturity ?
This is confusing.
over 12 years; business finance business supply chain for 35 years
Maybe they just have a really really good algorithm
I sleep much better after selling my $20 EE bond last week.
What do all these mean to the average man on the street? How can we benefit from knowing these stuff?
your issue is you are only talking about FEd inrterest rate. The money market an liquidity is increasing. Both have to be done cosidered together to have proper picture.
Biden is smartly in the back ground investing in jobs on infrastructure.