American Economics Thread

[localizer]

But this time, the debts are considerably enormous and the FED cannot possibly take the larger portion of it. Without the domestic incentives, and, with the lack of major investors, they cannot present the collateral necessary to float. Late November, Ray Dalio, an investor with 35 years of experience in the Asian markets, had roughly mentioned the lack of interest from the domestic actors.

If the Biden administration is determined to follow the Trump administration's Asia policies, especially the ones concerning China and Taiwan, I don't see a comfortable solution for the inevitable debt crisis. Japan cannot do much on its' own as their growth rate was far from being competitive, even before the pandemic...

Japan is dumping

Please, Log in or Register to view URLs content!

Recent rise in yields are all from institutional dumping

 

[ansy1968]

Japan is dumping

Please, Log in or Register to view URLs content!

Recent rise in yields are all from institutional dumping

@localizer

And Belgium is the biggest buyer, why would Belgium buy UST notes instead of Europe bond and where did they get the money? I think the EU should investigate it for a plausible money laundering scheme.

 

[siegecrossbow]

China couldn’t help this time even if it wanted to. It has its own share of debt problems to deal with.

 

[localizer]

China couldn’t help this time even if it wanted to. It has its own share of debt problems to deal with.

China is using this opportunity to refinance like those negative yielding bonds I think. Could also use the opportunity to print out of the debt issue, but would require disciple to not get into the same position again.


Best way for US China to move forward is normalizing trade relations. GDP rate> interest rate=way out.

 

[Petrolicious88]

Japan is dumping

Please, Log in or Register to view URLs content!

Recent rise in yields are all from institutional dumping

How much money does China loose in these bonds if the US Fed continues to QE and Print money.

 

[localizer]

How much money does China loose in these bonds if the US Fed continues to QE and Print money.

Hard to say, depends on composition of the bond durations and the price they were purchased.


Right now not only is USD getting weak, commodity prices are also rising overall due to various factors.

We can see oil become very expensive when the COVID is resolved.

 

[azretonov]

Compared to the US or Japan, China's debts are miniscule. The EU is of no help due to its' own internal uncertainties, as their current crisis has an organic link with the 2008.

 

[horse]

How much money does China loose in these bonds if the US Fed continues to QE and Print money.

I would say nothing, there will be no losses.

The games those people play at that level of financial markets, is radically different than the rest of us retail customers.

If someone owns a trillion dollars worth of debt, they will hedge it all completely with some exotic derivative.

Outside of the players in that world, outside of that world no one cares about that because the retail customer generally do not have that type of funds nor are they really that interested in those weird games.

 

[2handedswordsman]

@localizer

And Belgium is the biggest buyer, why would Belgium buy UST notes instead of Europe bond and where did they get the money? I think the EU should investigate it for a plausible money laundering scheme.

There is nothing to investigate, this is how it works. Good old friends in need. The Theatre of the Absurd

EDIT, the capitalist system is something to investigate. Karl Marx did it 2 centuries ago

 

[kentchang]

@kentchang

thanks for the info bro, but what I read is the reverse, I try to google and look for it asap but can't find it anymore. the caveat is that China UST holdings had been lessen by 50 billion USD and the buyer like you said is from the Benelux country.

A sample below

Please, Log in or Register to view URLs content!

Please, Log in or Register to view URLs content!

Dec 15, 2020 — China and Japan, the two largest non-U.S. holders of Treasuries, ... Belgium's holdings grew by $21 billion to $239.6 billion, while those of ... “We saw very large sellers and large buyers, which partly helps explain why rates rose from their ... U.S. Treasury selling was the norm though in six of the last eight ...

1. $21B (or $50B) is such a tiny amount for UST bond market that I wouldn't read much into it.
2. I read the same article and I don't see anything in it that says situation has changed. Just which intermediary holding companies are used (or transferred into). I live in New York. My money in RBC is still my money. Maybe that is how they decided to park their Euros.