because... "China would not have anyone to sell the securities to" can someone clairify what mr. greenspan meant by this? While expressing concerns about China's runaway growth rate and what he described as overvalued stocks, Greenspan played down the prospect that Chinese authorities would sell Treasuries in earnest, forcing a sharp spike in U.S. interest rates. Asked at a commercial real estate conference if investors should be worried about this oft-cited concern, Greenspan said: "I wouldn't be, no." Still, Greenspan said the reason such a withdrawal was unlikely was that China would not have anyone to sell the securities to, hardly the sort of comfort jittery bond investors were seeking. http://news.yahoo.com/s/nm/20070612/bs_nm/usa_economy_greenspan_dc_1 I guess that if China can't sell (for whatever reason) then they will have to wait until maturity. Anyone know when most of these Treasuries will come due?
He's saying he's not worrying about them dumping them on the open market because of the price impact it would make (not in china's favor). I think he also mentioned something to the tune of "it would hurt them more than the u.s.). That's from my recollection anyway and I only skimmed over the comments.
I found it odd that he would use that sort of phrase to describe the position. Maybe it is like a car dealer saying he just sold a car that he wouldn't buy back.
forget selling them, at this point if China just stops buying more, rates will rise. He is saying that they ARE THE buyers and if they ain't buyin', nobody else on the bid to hit.
Exactly! China is done with us for the most part...the tariffs and political pressures don't help us any. China is investing a shitload of money in S. America and Africa where returns will be better. I don't blame them.
Central Banks dont have to "mark-to-market" so they dont have to show profit and loss on debt holdings..... think it over...China dumps a few treasuries and the Dollar rises in relation to the yuan....thereby reducing the pressure for China to revalue in the open market..... China used the debt markets to keep rates cheap and subsidize exports.....now that China is stuffed with dollars...they can afford to threaten to sell treasuries to defend thier currency policy... this is what happens when the US sells its soul to a foreign power and in turn becomes an economic colony of Asia
This whole situation just seems like a giant powderkeg. I wonder what scenerios would cause the Chinese to be forced out of their holdings, regardless of whether they want to or not. [On a side note, higher US interest rates should imply a stronger USD ... This is contrary to the "dollar going to zero" sentiment...] Also, what would happen when the Shanghai bubble pops, the Chinese central bank would be forced to cut rates, probably by a lot. I wonder how that would play out. Hot money would evaporate from China and/or the Asian region and end up in the US? It seems like there are many links in the chain that need to be known.
For yields to rise, China just needs to STOP BUYING FUTURE USA BOND ISSUES. Without any selling of their current positions. I hear they have moved to buy EURO bonds and have stopped buying USA bonds.
Theyre stuck. And they keep avoiding a recession just like the US by keeping the money supply at super high levels. I don't think we have seen the parabolic inflation stage, but its coming. How about 6 dollar gas and 6 dollar milk.