China May Buy Less US Debt...Or Even Stop.

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https://www.cnbc.com/2018/01/10/china-is-reportedly-thinking-of-halting-us-treasury-purchases.html

China is reportedly thinking of halting US Treasury purchases and that's worrying markets right now
By Fred Imbert|Jan. 10th, 2018

Patrik Stalloarz | AFP | Getty Images
China's President Xi Jinping (L) and US President Donald Trump attend a working session on the first day of the G20 summit in Hamburg, northern Germany, on July 7, 2017.
China, the United States' biggest buyer of sovereign bonds, could be slowing down or even halting its purchases, according to a report.

Bloomberg News reported Wednesday, citing people familiar with the matter, that officials in Beijing have recommended the Chinese government lowers — or even stops — its buying of U.S. sovereign debt.

The report also notes that Chinese officials think U.S. debt is becoming less attractive compared to other assets, adding that trade tensions between the two countries could provide a reason to slow down or halt the purchases.

"If China wasn't the largest foreign holder of US debt this wouldn't be a big deal. But, they are," said Peter Boockvar, chief investment officer at Bleakley Financial Group.

The news is worrying markets.

Treasury prices fell, boosting yields. The U.S. dollar also fell against most currencies and gold increased. Dow futures were down more than 110 points.

"I think the Chinese will contribute to the removal of liquidity from the U.S. bond market," said Michael Shaoul," chairman and CEO of Marketfield Asset Management. "That's not helpful to a bond market that's already under pressure."

A taper in Chinese purchases would come as the Federal Reserve unwinds the massive balance sheet it amassed following the financial crisis. The Fed is also expected to raise rates three times this year. In 2017, the central bank also hiked rates three times.

The U.S. 10-year yield rose to 2.59 percent on Wednesday, hitting levels not seen since last March. The dollar also fell against a basket of major currencies, trading down 0.5 percent at 91.96.

Click here for the full report.

 

[Chinese-Dragon]

The White House is behaving like a psychopath, threatening all their allies over minor non-binding UN votes (like the Jerusalem embassy issue). And they are threatening nuclear war at the drop of a hat (my nuclear button is bigger than yours!) like they are internet trolls playing a video game.

US treasury bonds are not a safe investment, and they don't pay well either. Certainly not if the White House gets the nuclear war they are so desperately trying to start.

Ideally we should be acquiring assets that are tangible in nature, like land, resources, factories, real estate, ports, etc. Like the farm land we bought in Ireland and Kazakhstan, or the ports we are acquiring in Greece and Sri Lanka.

 

[Indus Pakistan]

land we bought in Ireland and Kazakhstan

It would be great if China bought irrigated land or land with potential for irrigation in Pakistan. Then it could apply hi-tech solutions like drip feed and other technologies including improving seed cultivars. Three or even four times gain in productivity could be garnered. this along with laying improved logistic chain with efficient cold storeage would be win win for the investors and Pakistan. The technology and the way of doing things would spread across the technologically starved agri-sector in Pakistan helpming to bring revolution in the rural areas.

 

[Beast]

Anybody noticed USD keeps dropping in value compare to other notes?

Looks like Yuan bond and internationalized of RMB is a stunning success. I suggest those holding USD quickly convert to RMB now. You might lose 10percent of the value if you hold more than a year.

 

[大汉奸柳传志]

should dump em

 

[katsung47]

That's only a tactic for the coming trade negotiation. To warn US not pressure China too much.