CHINA WILL CUT HOLDINGS OF U.S TREAS FROM CURRENT ABOVE $1T TO ABOUT $800B

[StonksStonksStonks]

CHINA WILL FURTHER CUT HOLDINGS OF U.S TREASURIES FROM CURRENT LEVEL ABOVE $1 TRILLION TO ABOUT $800 BILLION - STATE MEDIA

source https://twitter.com/Fxhedgers/status/1301603409817030656

[avikz]

Good! This won't affect US economy much but this way China will slowly be cut out of the world under the current rule of the dictator leader Xi Zinping. Since last couple of years, China has been showing its ugly face to the rest of the world through. All its neighboring countries like Hong Kong, Taiwan, India are facing the heat of such nasty mentality of China and now the world is fighting back. From trade freezing to Chinese application ban, world is slowly taking measures to curb Chinese expansionist mentality.

The world trade is still dominated by US and its allies, so if China tries to do something drastic, it will harm the Chinese businesses only. Not immediately but in long run! China is now considered as biggest threat to the world peace.

[davis196]

Good! This won't affect US economy much but this way China will slowly be cut out of the world under the current rule of the dictator leader Xi Zinping. Since last couple of years, China has been showing its ugly face to the rest of the world through. All its neighboring countries like Hong Kong, Taiwan, India are facing the heat of such nasty mentality of China and now the world is fighting back. From trade freezing to Chinese application ban, world is slowly taking measures to curb Chinese expansionist mentality.

The world trade is still dominated by US and its allies, so if China tries to do something drastic, it will harm the Chinese businesses only. Not immediately but in long run! China is now considered as biggest threat to the world peace.

Don't be so sure about that.If Joe Biden becomes president,the relations between USA and China might change.Biden will try to stop the trade war and end the "cold war" that was started by Trump.
China will sell US government bonds for 200 billion dollars and invest those billions in it's own economy,I guess,which isn't that bad for Xi Jinping.The Chinese want to be more independent from the US dollar and from their giant export of goods and services towards the USA,so that's why they will try to increase their export to other countries and focus on increasing their domestic consumption of goods and services.

[bryant.coleman]

Interest rate yield for the United States treasury bond has gone well below the inflation levels for USD. So holding these bonds can actually result in a net loss for the investor. Gold has proved to be a much better alternative, and it's price has increased by more than 60% since the last three years. The central banks of China and Russia have shifted more to bullion these days.

[audaciousbeing]

Good! This won't affect US economy much but this way China will slowly be cut out of the world under the current rule of the dictator leader Xi Zinping. Since last couple of years, China has been showing its ugly face to the rest of the world through. All its neighboring countries like Hong Kong, Taiwan, India are facing the heat of such nasty mentality of China and now the world is fighting back. From trade freezing to Chinese application ban, world is slowly taking measures to curb Chinese expansionist mentality.

The world trade is still dominated by US and its allies, so if China tries to do something drastic, it will harm the Chinese businesses only. Not immediately but in long run! China is now considered as biggest threat to the world peace.

Don't be so sure about that.If Joe Biden becomes president,the relations between USA and China might change.Biden will try to stop the trade war and end the "cold war" that was started by Trump.
China will sell US government bonds for 200 billion dollars and invest those billions in it's own economy,I guess,which isn't that bad for Xi Jinping.The Chinese want to be more independent from the US dollar and from their giant export of goods and services towards the USA,so that's why they will try to increase their export to other countries and focus on increasing their domestic consumption of goods and services.

One thing of note is that whatever decision each country is taking in this trade war, there is nothing permanent whatsoever. The same government that would probably swore that they will not have anything to do with a particular country or tribe will still call them to a round table discussion when things change or when another party with different ideology takes over.

My concern is the number of people that would be burnt because of these decisions among countries and nothing will be done to make them whole even when the table turns. So, if China should reduce the holding of US treasury, its just sending a message that we could crash it if we wanted to, it depends on the level of cushions that they themselves have put in place.

[jaysabi]

China is becoming more and more irrelevant because the Fed will buy as many treasuries as is necessary now. Whether or not that will lead to the rampant inflation everyone soon and gloom’s about is yet to be seen. It hasn’t so far after all.

Personal note, posting in all caps makes you look like a loony, not someone to be taken seriously about anything. Are you the person who runs that forex twitter? Cuz every tweet is written in all caps as well. 

[Serco]

The world trade is still dominated by US and its allies, so if China tries to do something drastic, it will harm the Chinese businesses only. Not immediately but in long run! China is now considered as biggest threat to the world peace.

is it the chinese way to beat US as biggest country in the world. they started economic war to US and continue previous conflict.USA should worry with china condition in few year ago, they show good growth in any field especially in economic and military side. many strategy issued to hold china growth. but no one could do this.

[Febo]

Interest rate yield for the United States treasury bond has gone well below the inflation levels for USD. So holding these bonds can actually result in a net loss for the investor. Gold has proved to be a much better alternative, and it's price has increased by more than 60% since the last three years. The central banks of China and Russia have shifted more to bullion these days.

Exactly! China is most likely buying gold or gold mine shares as Warren Buffet does. I am surprised China still held so many US treasury bonds after USA showed as so unreliable partner over last few years. Well at least the were not increasing the amount as they did in years before.

[Hydrogen]

China, russia, japan and others have implemented "US de dollarization" policies over the past 10+ years.

They've drastically reduced holdings of US bonds, dollars and debt. The federal reserve is now the largest holder of US bonds.

Its not the most equal relationship in global affairs, seeing as how the federal reserve (probably) loans free cash to foreign banks to stimulate foreign economies. While foreign nations are unwilling to do the same for the united states.

[jaysabi]

China, russia, japan and others have implemented "US de dollarization" policies over the past 10+ years.

They've drastically reduced holdings of US bonds, dollars and debt. The federal reserve is now the largest holder of US bonds.

Its not the most equal relationship in global affairs, seeing as how the federal reserve (probably) loans free cash to foreign banks to stimulate foreign economies. While foreign nations are unwilling to do the same for the united states.

Do you not recognize the folly of premise a belief or economic view on something that you don’t know happens? If you have any evidence to suggest the Fed loans free cash to foreign banks, that’s one thing. But you’re just throwing unsubstantiated ideas out into the ether and then using that to conclude something isn’t right (in this case, the lack of reciprocity.)

[stompix]

China, russia, japan and others have implemented "US de dollarization" policies over the past 10+ years.
They've drastically reduced holdings of US bonds, dollars and debt. The federal reserve is now the largest holder of US bonds.

If China holds US bonds, the US is doomed, they will all be slaves of China.
If China sells US bonds, the US is doomed, the de-dollarisation is the end of the US.
If a bear takes a dump in the US, the US is doomed, even bears are shitting there, if a panda drops a dump in China, oh, a sign of good luck!!!

Even if the unemployment would turn negative, the debt will be erased, the GDP would grow 100% a day, and the US the only country left on the surface of the earth and people would still talk about how this is bad for them.

Also, in 2016 Japan held 1.13 trillion of US bonds, now it has 1.26, so....nope!

So, if China should reduce the holding of US treasury, its just sending a message that we could crash it if we wanted to, it depends on the level of cushions that they themselves have put in place.

Quite the opposite, decreasing their holdings makes them irrelevant, like a guy with 1mBit wanting to crash the price on binance.

[bryant.coleman]

Interest rate yield for the United States treasury bond has gone well below the inflation levels for USD. So holding these bonds can actually result in a net loss for the investor. Gold has proved to be a much better alternative, and it's price has increased by more than 60% since the last three years. The central banks of China and Russia have shifted more to bullion these days.

Exactly! China is most likely buying gold or gold mine shares as Warren Buffet does. I am surprised China still held so many US treasury bonds after USA showed as so unreliable partner over last few years. Well at least the were not increasing the amount as they did in years before.

Almost all the major economies used to hold huge quantities of United States treasury bonds, as these were considered as the most stable investments using fiat currency. If I am not wrong, Japan is the largest holder of the United States treasury bonds. I am not sure about China, but they used to be at no.2 position. Now they are taking steps to reduce their holdings.

[hugeblack]

Is this news confirmed because I did not find it in the headlines?
Reducing TREASURIES by 20% in one year is considered very high, but what is the reason?
The trade war is still cold, and neither side has used the policy of maximum pressure. It will also be a tool to force the other side to make concessions that make the negotiating position better.


If the trade war between the two countries intensified, we may witness the use of some pressure cards, but I do not think that the countries will go far in this, most likely it will end with the banning of some companies.

[abhiseshakana]

China, russia, japan and others have implemented "US de dollarization" policies over the past 10+ years.

They've drastically reduced holdings of US bonds, dollars and debt. The federal reserve is now the largest holder of US bonds.

Its not the most equal relationship in global affairs, seeing as how the federal reserve (probably) loans free cash to foreign banks to stimulate foreign economies. While foreign nations are unwilling to do the same for the united states.

Yuanization and dedolarization are just bluffs without any meaningful action. If China releases US bonds, under current conditions the US cannot possibly pay. If the US prints new debt to repay a debt to China, the value of US bonds will fall on the market and the yield will be higher. then the dollar value will fall. So that US companies have difficulty getting investment funds in the market. On the other hand, the RMB currency will strengthen further so that the cost of production in China is high and reduces the competitiveness of Chinese goods in America. The ending is the threat of layoffs in China.

In fact, China is bluffing but still holding US bonds by continuing to print RMB to buy dollars, with this trick, the RMB is devalued and the dollar strengthens which is certainly beneficial for China because the price of Chinese products is increasingly competitive and money continues to rotate in China. So it can be concluded, there is a symbiotic mutualism between China and the US, China helps America to print money by owing it to China.

https://www.thebalance.com/who-owns-the-u-s-national-debt-3306124
https://www.thebalance.com/u-s-debt-to-china-how-much-does-it-own-3306355

[bryant.coleman]

Is this news confirmed because I did not find it in the headlines?
Reducing TREASURIES by 20% in one year is considered very high, but what is the reason?
The trade war is still cold, and neither side has used the policy of maximum pressure. It will also be a tool to force the other side to make concessions that make the negotiating position better.

I don't think that they are considering this as a retaliatory measure. Perhaps they are afraid that the Americans will impose some form of sanction or embargo, which will make these bonds completely worthless. IMO, rather than retaliating against the Americans, this is the main intention for getting rid of the treasury bonds. They may be moving their reserves to gold or other safe assets (which are not impacted by the sanctions).

[beerlover]

I would say they really need it, they could sell as much as they can, they could sell them all if they want to, it is not really a big deal for USA and it is really not a huge deal for China neither. You do realize that these are all countries with unlimited power right?

China could print enough Yuan to buy 1 trillion dollars total, and not really get hurt, try something like that in smaller countries, like lets say Taiwan for example and you are ruining the whole finance of the nation, do that in USA or China and nothing happens. Hell USA just printed out 4.2 trillion dollars in 2020 alone, you think they would be worried China selling their treasury bonds? They wouldn't care about it at all. Obviously it is sending a message, but that's it, nothing impactful other than a message.

[(o)(o)ilikeboobs(o)(o)]

Currently, China is the largest creditor of the US and they have done so to enjoy preferential treatment from the US government. Currently, the US is putting a lot of pressure on China, the trade war, and several new decrees from the US are killing Chinese businesses. The act of threatening to sell off US dollar bonds is a threat to devalue the dollar. Damage to the dollar will soon be visible.

[BrewMaster]

all that money may not tank US economy but it will harm it a little bit and not to mention that the money doesn't just evaporate but it will go back to China and will be invested in Chinese economy strengthening it more.

with the world economy in a disastrous state because of the widespread of the virus and the US printing a lot more money than normal, we are headed for devaluation of US dollar one way or another.
with all the wards that Trump has been starting all over the world things are getting even worse. we could be headed to repetition of 2008 but this time instead of banks it will be caused by Trump...

US dollar has already lost some of its value but it is not noticeable because other fiat currencies in the world are not having a good time either but it will show itself in form of inflation.

[stompix]

with the world economy in a disastrous state because of the widespread of the virus and the US printing a lot more money than normal, we are headed for devaluation of US dollar one way or another.
<>
US dollar has already lost some of its value but it is not noticeable because other fiat currencies in the world are not having a good time either but it will show itself in form of inflation.

But, but....
Isn't a weak dollar helping exports and hurting imports? Exactly the opposite picture for a strong yuan in an economy such as China which relies on exports? So, a weak euro and us dollar aren't actually bad news for China, which might want to again work on their manipulation rates and drop the fx rates again?

Currently, China is the largest creditor of the US

No, it's not, a simple google search will tell you more than enough.

Hell USA just printed out 4.2 trillion dollars in 2020 alone, you think they would be worried China selling their treasury bonds? They wouldn't care about it at all. Obviously it is sending a message, but that's it, nothing impactful other than a message.

Wait till the elections are over, no matter who comes into office they will have to get the printing at triple speed, they can flood the market at any time with sums compared to the entire GDP of China, and as ussual, it's the rest of the world that is going to be hurt more than them, like in 2008 when poeple across the globe who couldn't spell mortgage or had no idea where washington was on a map lost eveything.

[semobo]

Is this news confirmed because I did not find it in the headlines?
Reducing TREASURIES by 20% in one year is considered very high, but what is the reason?
The trade war is still cold, and neither side has used the policy of maximum pressure. It will also be a tool to force the other side to make concessions that make the negotiating position better.

I don't think that they are considering this as a retaliatory measure. Perhaps they are afraid that the Americans will impose some form of sanction or embargo, which will make these bonds completely worthless. IMO, rather than retaliating against the Americans, this is the main intention for getting rid of the treasury bonds. They may be moving their reserves to gold or other safe assets (which are not impacted by the sanctions).

If this is the reason then they are supposed to convert everything right, so they are just doing it like a warning to USA so they won't take retaliatory actions against them with border issues of other nation especially the South China sea issue.Trump is not going to leave the Chinese to do the things as they wish as long as they are having enough power to execute it.