Is China trying to tell us something about what’s coming to the US?–China Sold Second-Largest Amount Ever Of US Treasurys In December: And Guess Who Comes To The Rescue

Greetings,

China is building up its strategic reserves such as copper, oil, gas, and minerals. They are also building up huge gold and silver reserves outlawing overseas sales. On top of this they have dozens of trade deals with nations around the globe that excludes the dollar and uses the Yuan in transactions.

Now if we look at these moves coupled with a large military build-up we can see the end of the economic tunnel. They publicly announced no more buying of US treasuries. They publicly announced a transition of the Yuan to a global arena.

Then after that they allowed other nations to buy treasuries denominated in Yuan. They then announce major nations on each continent as trade hubs for transactions that bypass the dollar and uses the Yuan. They then opened a Yuan trade bourse that buys and sells oil and gas futures ,not using the dollar, but using the Yuan.

This means that they are displacing the dollar as the world’s trade currency. They are also preparing to combat any US military aggression that may follow. And now this…It signifies that these are the last hours(days) of US dollar domination!!!!

   China Sold Second-Largest Amount Ever Of US Treasurys In December: And Guess Who
Comes To The Rescue

While we will have more to say about the disastrous December TIC data shortly, which was released early today, and which showed a dramatic plunge in foreign purchases of US securities in December – the month when the S&P soared to all time highs and when everyone was panicking about the 3% barrier in the 10 Year being breached and resulting in a selloff in Tsy paper – one thing stands out.

The chart below shows holdings of Chinese Treasurys (pending revision of course, as the Treasury department is quite fond of ajdusting this data series with annual regularity): in a nutshell, Chinese Treasury holdings plunged by the most in two years, after China offloaded some $48 billion in paper, bringing its total to only $1268.9 billion, down from $1316.7 billion, and back to a level last seen in March 2013! 

 

This was the second largest dump by China in history with the sole exception of December 2011.

 

That this happened at a time when Chinese FX reserves soared to all time highs, and when China had gobs of spare cash lying around and not investing in US paper should be quite troubling to anyone who follows the nuanced game theory between the US and its largest external creditor, and the signals China sends to the world when it comes to its confidence in the US.

Yet what was truly surprising is that despite the plunge in Chinese holdings, and Japanese holdings which also dropped by $4 billion in December, is that total foreign holdings of US Treasurys increased in December, from $5716.9 billion to 5794.9 billion.

Why? Because of this country. Guess which one it is without looking at legend.

 

That’s right: at a time when America’s two largest foreign creditors, China and Japan, went on a buyers strike, the entity that came to the US rescue was Belgium, which as most know is simply another name for… Europe: the continent that has just a modest amount of its own excess debt to worry about. One wonders what favors were (and are) being exchanged behind the scenes in order to preserve the semblance that “all is well”?

Source: www.zerohedge.com

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