China Can’t Buy Enough Bonds as Dollar No Deterrent

China just can't get enough


Now, staying solely on ATS one would have believed that china was liquidating their US assets as fast as they could get to the bank, and had failed to show for initial bond offerings. What does this mean, then? Things not as bad as they looked initially this fall?

reply to post by D.E.M.


"fall or "Fall". I have to ask, each has a rhetorical underpinning.

Treasuries are “starting to look like even a better value with a weaker dollar,” said Dave Chappell, who manages $90 billion in London at Threadneedle Asset Management Ltd., and has been buying longer maturity U.S. government debt.

Seems like the good old buy low and sell high thing to me.

Foreign governments have little choice than to buy Treasuries because they hold so many dollars. The U.S. dollar accounts for 65 percent for world currency reserves, up from 62.8 percent in mid-2008, according to the International Monetary Fund in Washington.

“China and a few other central banks have grumbled about the dollar but they don’t have many other alternatives so they keep buying,” said Michael Atkin, head of sovereign research at Putnam Investments in Boston, who helps oversee $12 billion in fixed-income assets.

But then they paint a picture of a lack of options given current commitments. It's hard to tell what the real story is with this one.

Throwing good money after bad?

Something doesn't seem right about the article. First of all it says the dollar rose today to 77.1 on the Dollar Index, that is not true. It fell today to 76 and is at 1.48 exchange to Euro money.cnn.com...

Peter Schiff also talks about how low the dollar is, he doesn't even mention china buying these treasuries and this is his area of expertise.



I think this is major disinfo, might be because of the G20 this weekend. I'm gonna try to confirm your source but doubt I will find anything.

reply to post by asmall89


Yep.
I wouldn't be shocked if it were disinfo.

Over a ten-month period, the Center for Media and Democracy (CMD) documented television newsrooms' use of 36 video news releases (VNRs)—a small sample of the thousands produced each year. CMD identified 77 television stations, from those in the largest to the smallest markets, that aired these VNRs or related satellite media tours (SMTs) in 98 separate instances, without disclosure to viewers. Collectively, these 77 stations reach more than half of the U.S. population. The VNRs and SMTs whose broadcast CMD documented were produced by three broadcast PR firms for 49 different clients, including General Motors, Intel, Pfizer and Capital One. In each case, these 77 television stations actively disguised the sponsored content to make it appear to be their own reporting. In almost all cases, stations failed to balance the clients' messages with independently-gathered footage or basic journalistic research. More than one-third of the time, stations aired the pre-packaged VNR in its entirety.

www.prwatch.org...

we can be sure this happens all the time and n fact on a daily basis

reply to post by asmall89


I don't want to "contrabute" to his campaign if he isn't going to talk about the latest with regard to China and treasury bonds.

My bad the article is from yesterday where the dollar did gain against currencies.
Probably because the Chinese bought treasuries, but they were only short term treasuries, this says that they are just worried about inflation as everyone else is. I wonder what they will be doing with the treasuries... I mean why buy now if it's gonna get worse in the future, that's a major loss. Unless they know something we don't.

money.cnn.com...

reply to post by asmall89


If it doesn't get any better, than they haven't really lost much, right? If it DOES get better they stand to gain a little bit. I hope you guys can teach me some of this stuff, or I hope I can learn it.

Does China buying treasuries have any positive impact on our economy? It keeps us from buying some of our own debt, right? Wouldn't it edge some numbers up ever so slightly for us somewhere else?

If other numbers get edged up, wouldn't China stand to gain when others were more eager to buy the US treasuries?

If I bought a few treasuries, wouldn't that make them more attractive to someone else? After all, I'm China, and I ought to know what's going on. When they are artificially, slightly more attractive, could I not then sell them to someone else?

Ignorance is hard on me. Is it possible that China is just trying to manipulate something? It didn't seem like an awful lot of treasuries and they only own like 800 billion worth? Isn't that a pretty small number compared to the debt and unfunded liabilities that we are on the hook for?

When someone buys a lot of stock, or just enough, doesn't the price go up? Is this WAY not the same thing?

reply to post by KSPigpen


The problem is with every treasury or debt we sell to China the less valuable their previous purchases become because the Dollars are coming from no where on no real signs of economic growth & wealth.

It's like what Grant did after the Civil War people wanted inflation at the time so he put a whole bunch of Federal Gold on the market and it dropped dramatically in value. There was too much inflation lol.

The Fed is printing money like mad people our deficits is growing exponentially especially after the recession. This will (if not already has) make dollars less valuable.

Your right there will be some good signs when china buys treasuries, like yesterday the dollar gained. It really hasn't been recently. I was really quite shocked it did yesterday but now it makes sense. Also when the Dow goes down generally the Dollar gains as well, with the exception of last September.

My guess why China is still buying?
A) They're expected too. Our politicians have probably been twisting their arms to keep buying.
B) The G20 this weekend (don't want the dollar to lose too much value do we?)
C) They don't want to totally ruin the US so they're probably trying buy time to figure out the best course of action without starting a war.

[edit on 22-9-2009 by asmall89]