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View Full Version : Japan tops China as No. 1 holder of USA bonds.....



MMC
12-17-2016, 02:28 PM
Looks like China isn't the #1 holder of our debt anymore. Just wont be able to hold leverage over us like they thought they could do. What say ye?





Japan has overtaken China as the biggest owner of U.S. government bonds, the latest sign that China is reducing its Treasury holdings to support its currency, the yuan, which has come under pressure from capital fleeing the mainland in search of investment opportunities.


At the end of October, Japan held $1.13 trillion of U.S. government debt, according to the U.S. Treasury, topping China's holdings, which totaled $1.12 trillion — its smallest helping of U.S. debt since 2010.


China's holdings of U.S. bonds fell by more than $4 billion from September to October and are down roughly $14 billion since October 2015, Treasury data show. China's holdings of U.S. debt have fallen five straight months.

The main reason China is liquidating part of its huge stake in U.S. debt is to prevent a sizable decline in the yuan.



The yuan has lost 7% of its value vs. the U.S. dollar this year. One dollar buys 6.96 yuan, up from 6.49 yuan at the end of 2015. The dollar spiked after Wednesday's interest rate increase by the Federal Reserve and hints from the Fed that three more rate hikes are to come in 2017.


In contrast, Japan's central bank prints money to stimulate its economy, and some of that cash finds its way back into the U.S. government bond market, helping to elevate Japan to the No. 1 spot in foreign holders of U.S. debt, Merk says......snip~

http://www.usatoday.com/story/money/markets/2016/12/16/japan-not-china-biggest-us-debt-holder/95512328/

Amadeus
12-17-2016, 02:49 PM
America's debt remains the gold standard, but I'm a tad worried that Trump will play shenanigans and jeopardize that status. Trump suggested that he would on the campaign trail. I hope he's not that stupid, but he made his fortune by engaging in this practice (see sig).

MMC
12-17-2016, 04:32 PM
At least the Japanese is looking to spend money, here in the US. Also I don't have a problem with the Chinese getting rid of some more of those bonds.

Don
12-17-2016, 04:41 PM
I think we have leverage over countries that hold our debt. They want to be paid back at some point. Our attitude about how we honor our debts should mirror the attitudes of the debt holding countries. If they play games like China maybe we should play games with the IOU's they hold.

Amadeus
12-17-2016, 05:10 PM
I think we have leverage over countries that hold our debt. They want to be paid back at some point. Our attitude about how we honor our debts should mirror the attitudes of the debt holding countries. If they play games like China maybe we should play games with the IOU's they hold.
Trump has suggested honoring pennies on the dollar, just like he does with the banks foolish enough to lend to him (see my sig). This is a great way to become a junk bond nation.

donttread
12-18-2016, 08:04 AM
Trump has suggested honoring pennies on the dollar, just like he does with the banks foolish enough to lend to him (see my sig). This is a great way to become a junk bond nation.


I like that idea for several reasons

1) We cannot afford this debt
2) We supply food to these countries so what are they going to do? Stop trading with us and eat their bond certificates?
3) It would end or seriously impair our governments ability to borrow money, which is the only thing that will stop them.

Amadeus
12-18-2016, 08:11 AM
I like that idea for several reasons

1) We cannot afford this debt
2) We supply food to these countries so what are they going to do? Stop trading with us and eat their bond certificates?
3) It would end or seriously impair our governments ability to borrow money, which is the only thing that will stop them.

OH GOD. There are actually people who support turning America into Zimbabwe?

donttread
12-18-2016, 08:44 AM
OH GOD. There are actually people who support turning America into Zimbabwe?

Bit if a Quantum Leap there ! But, I think we have proven via the Bushbama years and most of the past half century that our government is essentially incapable of living within it's means. If you doubled their revenue tomorrow they'd be running up debt again within 5 years. Yeah, it's that bad. Besides it's all e-money anyway and the bond holders countries can make them some e-money to make up for it. But I honestly believe our government will borrow until someone says no. Look how they went after S&P for a slight credit downgrade despite having several years worth of "revenue" floated in UNSECURED debt.

Amadeus
12-18-2016, 08:57 AM
Bit if a Quantum Leap there ! But, I think we have proven via the Bushbama years and most of the past half century that our government is essentially incapable of living within it's means. If you doubled their revenue tomorrow they'd be running up debt again within 5 years. Yeah, it's that bad. Besides it's all e-money anyway and the bond holders countries can make them some e-money to make up for it. But I honestly believe our government will borrow until someone says no. Look how they went after S&P for a slight credit downgrade despite having several years worth of "revenue" floated in UNSECURED debt.

There's a reason why few (if any) banks will lend to Trump. His credit is in the crapper specifically because he promised to stiff the banks and pay pennies on the buck. He brags about this. Again, see my sig. He thinks people are stupid for lending to him, and he's right.

Docthehun
12-18-2016, 09:13 AM
I like that idea for several reasons

1) We cannot afford this debt.

The debt is roughly 20 trillion. It had been estimated that known reserves of oil and natural gas on Federal land, were alone worth 50 trillion. That, by itself, makes for a pretty strong balance sheet and that most of the IOU's are really held by you and I.