China cuts US Treasury stockpile, dropping to No 3 spot among foreign holders. Britain takes China’s place as America’s second-biggest overseas creditor as Beijing pushes to diversify foreign exchange reserves.

20 comments

1. And this is where the real shit hits the fan… 

2. They don’t respond well to threats or bullying.

3. This is China pulling out another Jenga piece. A pretty low one, too, possibly a side piece. Don’t breathe on Wall Street, it may topple over.

4. It’s a pretty modest move honestly.

5. Where japan at? When is it their move?

6. I’ll take “Shit We Knew Was Coming” for $200 Alex

7. This is reporting on moves China made in March anticipating Trump’s trade war. Question is what happens next?

8. This is Britain’s signal to consider diversifying their investments, as well. You know, just in case shit gets crazy and the U.S. dollar suddenly isn’t worth the paper it’s printed on because they’ve printed themselves out of every problem for decades now. That’s not a long term solution in any reality.

9. Almost like Trump sweet talked his way into something he has no idea about and not consulting anyone. 

10. Guys you need to stop buying into histrionic sensationalism you don’t understand. Here are some facts:

    Contrary to all the propaganda about china owning U.S Debt… china owns less than 1 (EDIT: actually 2 – 759b/36T, but that’s immaterial to the argument) of outstanding U.S debt. In fact, the entire world owns only around 20% of U.S Debt.

    Yeah, that’s right. 80% of all treasuries are held by the fed and American investors. No single foreign country owns more than 1% of total outstanding treasuries, with Japan holding the most.

    If china dumps every single bond they have, nothing would happen really. The bond market would have a bad couple of weeks before U.S investors/the fed bought it up. You would need a coordinated effort among many major bond holders to actually move the needle here, and you’re not gonna get it. Japan is dependent on U.S security guarantees as is most of Europe. They actually are in a dicey situation in that they don’t really have all that much leverage to wield against the U.S in negotiations on matters of major geopolitical import as they’ve all delegated their defense/force projection capability throughout the post-war era.

    Meanwhile the U.S controls most of the worlds major maritime trade routes — to the extent that if they stopped patrolling them, many of them would instantly become unsafe/unusable. China might be able to contest this control in its backyard, but Japan/Europe/The Middle East/Latin America absolutely cannot.

    U.S hegemony isn’t going anywhere. The U.S dollar is in truth backed by the U.S military — by its global control of maritime trade. Until that changes, you’re not going to see the downfall/an end to U.S hegemony because bonds yields rise for a while or 1 country that owns less than 1% outstanding U.S debt decides to dump its treasuries. Such a shock can easily be absorbed, an empire that is at the end of the day one of force projection and physical might will have to be militarily repudiated or something that damages u.s global force projection really badly (like WW2 did for the European powers) will have to occur before this changes.

11. Man, China is setting up for a massive 5D chess move. Trump and his dumbass advisors are going to be left wondering what the hell happened.

12. All foreign currencies are linked and quoted against the USD. So, it makes no difference as far as the US dollar is concerned.

13. Seems reasonable given US behaviour?

14. Create a global reserve currency b4 the dollar can be challenged. That is not easy.

15. I genuinely think if China pulls 100% of their US Treasury Stockpile, war is inevitable.

16. America is so screwed. 4% of the worlds population and they control 30% of the worlds wealth. They had the audacity to elect a guy that said Murikkka was being ripped off by foreign nations. Well at that ratio the 96% did a shitty job ripping off the US. Now they want more for less. Ummmm. Huh…. I don’t think this ends well for the would be authoritarian who’s first act was to kill the golden goose.

17. The entire world holds US treasury bonds. They have no choice.
    A simple explanation – Consider the role of a bank. You keep your loose change at home and bulk money in a bank. There is no other choice for you. Even if you hate the bank and its manager, you will still keep your noney there out of no choice. Or go to another bank.

    The US treasury is one such bank. And there is no other alternate bank to go to. So, its not the US who wants asks for your deposit. Its the other way around.!

18. This suggests US treasuries aren’t the desired investments they once were.

    Bad news.

19. a warning shot over the bow of the US by china. they won’t hesitate to dump pretty much all of it if they wanted.

20. Americans never understand people of the old world think on a different timescale when it comes to such things. I saw it in business too.

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