that's insane...did they drastically increase the benefits? i can see that they quadrupled the benefits for workers, that applies to these newbies as well?
Chinese Economics Thread
- Thread starter Norfolk
- Start date
Technically, they are dumping US bonds not dollars to buy yen, they are keeping the actual USD that they have! China also did the same to defend the Yuan. The latest figures has this happening across a number of currencies not just in China and Japan. If it continues at the scale its been occuring then it could crash the US bond market, the threat of which may cause a snowball effect where everyone jumps ship before it happens!
USD is rarely held in cash form - its held in various investments, including among others, US Treasuries. US bonds are the mechanism by which FX reserves are held
No, daily US Treasury trading volume is ~$600bn. Central banks trying to manage FX floats don't go anywhere near that
Obviously there's volume when you sell something there has to be a buyer, if I buy and sell the same item 100 times a day it will generate 100x the unit volume daily.
Volume is not the issue offloading bonds will drop the price and increase its yields, when this happens in an excessive way it will put strain on any bond derivatives and cause any leveraged positions to collapse, leading to a systemic problem.
You can argue that the US is somehow 'special' and it won't happen but there's plenty of ex Lehman guys that will tell you otherwise.
Yep, essentially this. Nearly every large entity with more than a few million USD will rarely hold that as cash, but as short duration US Treasuries. For all intents and purposes, US Treasuries are classified as "cash or cash equivalents" in nearly every single corporate reporting form because it's essential that - cash. Money held as cash subjects the depositor to credit risk in the scenario the commercial bank its held in collapses(rare scenario these days, but hypothetically still possible), where as USTs are subjected to default risk by the US government, which by then, all bets are off.
That's not much of an issue with US Treasuries/Bonds because short duration treasury bonds are essentially treated as cash. There will always be a buyer for a 1 dollar bill if you're selling it for 99.99 cents.
Can you elaborate on what you consider to be a "bond derivative" where the sole underlining instrument is a US Treasury bond?
The Lehman's Brother collapse is under an entire different set of circumstances with completely different set of products. There is a huge difference between US Treasuries and corporate bonds/structured products.
Oh they mad
What do you expect from the same moron who implicitly stated that China's economy is much smaller based on some light activity seen from space...
Money & Macro channel thinks its smarter in money matters than a finance guy who is worth 20 billion dollars.
Lol.
No different from saying you can run faster than Peak Usain Bolt.
#DeludedDudes
supercat
Major
China needs to dump more UST and buy more precious and industrial metals.
On the other hand:
BTW, China has by far the most foreign exchange reserves in the world, despite the discrepancy between Trading Economics and Statista. Notice that Hong Kong has the world's 6th largest foreign exchange reserves, more than South Korea.
On the other hand:
BTW, China has by far the most foreign exchange reserves in the world, despite the discrepancy between Trading Economics and Statista. Notice that Hong Kong has the world's 6th largest foreign exchange reserves, more than South Korea.
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This is just another one of those clickbait channels for views, I would pay 0% attention