We shouldn’t be trading with the commie fuckers in the first place, and now that Obama has reduced the dollar to toilet paper and increased our deficit, the Chinese are bailing.
Japan has officially taken over China as the number one holder of United States Treasuries as China sold off more than $34 billion, which brings its total holdings down to $755.4 billion.
Tokyo, Japan – In December, China lowered its total holdings of United States debt by $34.2 billion to $755.4 billion from $789.6 billion and is now the second-biggest holder of US Treasuries, which is a sign that China is reacting to U.S. policy, according to Reuters. During the past year, China has vehemently showed its displeasure about the security of their dollar-denominated assets.……Xinhua notes that if reductions in holdings continue to decline then that could force the US government to make higher interest payments as the country runs record federal deficits, debt and tens of trillions of dollars in expenditures and liabilities. The news agency further noted that the multi-trillion dollar deficit cannot be sustained and will eventually ruin the economy.
http://www.digitaljournal.com/article/287708
A series of decisions by Chinese authorities on banking standards and currency holdings is fueling speculation that Beijing may be trying to curb its overheated economy, raise the value of its currency and reduce its exposure to foreign markets.
Twice in the past five weeks, China’s central bank has jacked up reserve requirements in an effort to limit bank lending, which, after more than doubling last year, soared in January.
Late last week, the People’s Bank of China announced that big banks will have to keep 16.5 percent of their deposits, up from 16 percent, on reserve at the central bank. In January, the central bank raised the requirement from 15.5 percent.
Raising the reserve requirement on banks will reduce the funds available for them to lend and, Chinese officials hope, dampen inflationary pressures.
Meanwhile, China is coming under intensifying pressure from the United States, Europe and developing economies to let its yuan currency rise in value, thus reducing what Beijing’s trading partners charge is an unfair trade advantage. China recycles the huge trade surpluses it runs with the United States into purchases of U.S. Treasury securities, helping keep its currency fixed at an artificially low rate.
http://www.washingtontimes.com/news/2010/feb/17/beijing-bank-moves-signal-attempts-to-cool-economy/
More:
……the U.S. Treasury Department reported Tuesday that Chinese holdings of Treasury securities plunged by $34 billion to $755 billion in December, dropping China into second place behind Japan in terms of foreign holders of U.S. debt.
Overall, the report said, foreign holdings of U.S. Treasury bills fell by $53 billion, which will put more pressure on the U.S. government to raise interest rates in order to sell the bonds — at the cost of damaging a fragile economic recovery.
“The Chinese are worried that we have unsustainable debt levels and we do not have a policy for dealing with it,” Alan Meltzer, an economics professor at Carnegie Mellon University, told the Associated Press.
http://www.washingtontimes.com/news/2010/feb/17/beijing-bank-moves-signal-attempts-to-cool-economy/
Unsustainable debt levels…there’s a revelation.