Thats all, the are not selling there current positions, the just stopped buying USA bonds. The are buying EURO bonds. They have gone to EUROPE as the EURO consumer will buy there goods. Why, because the debt ridden USA consumer is not buying as much as they used to.
No offense but you can't even spell "they" or use the correct "their" so without a source you don't seem very trustworthy.
million dollar question: if they really stopped buying USTs what are they going to do with excess USD from trade surplus? Sell it? Then it should not be bad bad for US equities - but what about Japan and all carry financing?! Or buy other assets? Which assets? Likely commodities or equities again - prepare for the ride.
has anyone considered that since we have threatened them time and time again to let their currency reflect true market forces, that they are actually positioning themselves to iniate this? Why buy US treasuries when your gonna smack the $$ against your own currency.
That's silly, it's more of a normalization of the curve. You'd be better off saying their selling UST's while using dollars to buy weapons from Russia Either way, the argument is BS..JMHO
maybe they will switch 1:1 for duration of 2008 Olympics to screw tourists even more In other words I am not sure that strong Yuan is in their interest now - what do they gain in the short term?
that's pretty weak argument (if it is argument at all). why is the curve normalizing then? if you traded rates for the past few years you would never say "it is just normalization of the curve". I am surprised how little interest this thread created given that in the next few months it is really all about this topic....