China Pulls the Plug on U.S. Treasuries → Washingtons Blog
China Pulls the Plug on U.S. Treasuries - Washingtons Blog

Tuesday, February 16, 2010

China Pulls the Plug on U.S. Treasuries


You've heard that:

Senior Chinese military officers have proposed that their country ... possibly sell some U.S. bonds to punish Washington for its latest round of arms sales to Taiwan.
You know that China is dumping American assets, unless backed by the government.

Now, the U.S. is reporting that:

Foreign demand for U.S. Treasury securities fell by the largest amount on record in December with China reducing its holdings by $34.2 billion.

The December drop in treasury holdings pre-dates the recent spat over Taiwan, and is therefore unrelated. However, it does show that China is starting to give up on our "too big to fail" nation (and see this).

And bond auctions are now starting to fail.

Total foreign holdings of U.S. treasuries fell by $53 billion. Japan has now passed China as the largest foreign holder of treasuries.

No comments:

Post a Comment

→ Thank you for contributing to the conversation by commenting. We try to read all of the comments (but don't always have the time).

→ If you write a long comment, please use paragraph breaks. Otherwise, no one will read it. Many people still won't read it, so shorter is usually better (but it's your choice).

→ The following types of comments will be deleted if we happen to see them:

-- Comments that criticize any class of people as a whole, especially when based on an attribute they don't have control over

-- Comments that explicitly call for violence

→ Because we do not read all of the comments, I am not responsible for any unlawful or distasteful comments.