What If China Dumps US Treasury Bonds?

[Toro]

$1.2 trillion is a lot of gold to take out of the country!

 

[JimmieD]

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China owns about $1.2T of our treasuries, and I guarantee ya, we know it. Supposedly during the meltdown, Russia approached them about getting together and dumping treasuries at the worst possible time. We're essentially like a doll on a string for them, and the only thing saving our asses is the symbiotic nature of the global economy. If and when China needs us less, we're a sitting duck.

This is a self-inflicted wound, just like all our other problems.

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So if they decided to "dump" their treasuries, what are they getting in exchange?

Or do you expect them to just write off multi-trillions of $ as a loss? Wouldn't that would make them look really ridiculous rather than cunning calculators? And of course by "them" we're not refering soley to the Chinese state, but the aggregate chinese economy - a big difference.

 

[JimmieD]

Here is another interesting point too - why is everyone so worried about China's treasury holdings in the first place? Japan owns about as much treasury debt as China does. Why does nobody fuss about Japan?

Actually the largest individual entities who own treasury debt are federal trust funds (ie, the taxpayers) and the Federal Reserve. Their holdings dwarf China's holdings.

 

[SteadyMercury]

Japan owns about as much treasury debt as China does. Why does nobody fuss about Japan?

That was so 80s... we've got a new scary demon to have irrational fears about.

 

[Zander]

This is worth repeating:

The American financial system, despite all it's existing problems, remains the most stable and low-risk in the world.

 

[william the wie]

Chinese bond portfolios are the GO To Hell funds for party cadre when the current regime tanks. The folks most likely to die when China goes to hell would give up their GOTH funds why?