You guys are missing the significant point of whole game; the right of reserves currency status. Chinese President Hu is going to Saudi Arabic in next week.
Comes with a very big cost. If you're implying that's what the Chinese are after, maybe in the long term. Right now, it's the last thing they want.
that 620 billion dollar gov't debt should be taken out and put back into the economy either by investments or other investments. holding gov't debt is the worse investment in the long run.
I was going to dump my TBT (UltraShort 20+ Year Treasury ProShares) position tomorrow morning since it has tanked the last 2 days. Maybe I will watch it a while longer to see if China's statements cause people to sell their bonds.
i think its all posturing/rhetoric. china needs the u.s. to buy their cheap shit with u.s peso's and we need them to finance our debt. this isn't going to change any time soon.
Just by looking at the shipping index, it seems this has already changed. International trade has essentially collapsed.
majority of gov't debt is to finance fucking wars etc. and waste of gov't bureaucrats and pay for prisons. man the chinese gov't has better use of capital than lend it to us gov't bonds .
I think China has some tough times ahead. $us has been flowing into China for years. I wont even buy anything made in china any more. I was long the FXP (ultra short china) for some of the run from 65. up to 200. It is at about 36. right now. I am thinking about getting back in for a while. It is pretty cheap and has limited downside risk and huge delta. The etf is almost as cheap as the call option. 100+ is not out of the question in the next several months. Info below good Trading http://www.proshares.com/funds/fxp.html?Current+Quote+and+Chart