China has become a net SELLER of U.S. Treasury notes and bonds!

[Neubarth]

* In 2006, China and Hong Kong accounted for more than 50 percent of the increase in the amount of Treasury debt sold to the public ...

* In 2008, their share had fallen to 22 percent as the U.S. government increased its public debt by a record $1.2 trillion ...

* In the first half of THIS year, China and Hong Kong acquired only 9 percent of the more than $800 billion worth of Treasury bonds that were sold — and now ...

* In June, China became a net SELLER of U.S. Treasury notes and bonds!

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Hopefully the other countries and the American Public will pick up the slack. This is not a doomsday situation, but it can create tremendous difficulty in our economy. To sell our bonds and notes to the public, we will have to get them to stop buying stocks. That can be easily done if Geitner and Bernanke simply tell Goldman that they want the P/E ratios on stocks to fall to normal valuation. The Dow would fall to below 5000 and people would look for the security of government bonds for future investment.

As of Friday afternoon, I am short the market. Let's see what happens now that it is obvious that China does not want our paper.

 

[Mad Scientist]

* In June, China became a net SELLER of U.S. Treasury notes and bonds!

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Hopefully the other countries and the American Public will pick up the slack. This is not a doomsday situation, but it can create tremendous difficulty in our economy. To sell our bonds and notes to the public, we will have to get them to stop buying stocks. That can be easily done if Geitner and Bernanke simply tell Goldman that they want the P/E ratios on stocks to fall to normal valuation. The Dow would fall to below 5000 and people would look for the security of government bonds for future investment.

As of Friday afternoon, I am short the market. Let's see what happens now that it is obvious that China does not want our paper.

China has been saying for a while that we need a more responsible economic policy. They're not gonna' wait around forever.
The American public is doing the right thing, paying off credit cards and increasing savings.

The govt' on the other hand...

 

[Paulie]

The American public is doing the right thing, paying off credit cards and increasing savings.

Amen.

 

[Neubarth]

The American public is doing the right thing, paying off credit cards and increasing savings.

Amen.

Well said there, Astute Illuminati (AI by another name).

 

[Paulie]

The American public is doing the right thing, paying off credit cards and increasing savings.

Amen.

Well said there, Astute Illuminati (AI by another name).

What, you don't think the public deleveraging themselves and building a savings is doing the right thing?

To be clear though, merely a CASH savings is probably not the wisest thing. At the very least, I'd suggest inflation protected treasuries. But even those probably won't be good enough with what's in our future.

 

[Neubarth]

I concure with you. The public should save and save. We have some bad times a comin'.

How frequently are those inflation indexed bonds updated for the rate of inflation. If they are updated on a quarterly basis they probable will not keep up with inflation as it soars in the years to come.

 

[eagleseven]

I concure with you. The public should save and save. We have some bad times a comin'.

How frequently are those inflation indexed bonds updated for the rate of inflation. If they are updated on a quarterly basis they probable will not keep up with inflation as it soars in the years to come.

Save, yes, but in investments that have value independent of legal tender.

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