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Wednesday, September 05, 2007

US bond pressure mounts

...and China has been selling off US Treasury bills, according to Gary Dorsch of Global Money Trends, featured in GoldSeek today:

"Beijing sees a “veto proof” protectionist bill sailing thru the US Congress later this year, and has been a net seller of US T-bonds for three straight months by a record amount of $14.7 billion, the longest period of sales by China since November 2000."


More on this from the Daily Telegraph here.


hatfield girl said...

Thought you'd be talking about this. Won't China be buying more useful things than gold though, rare,finite natural resources would make more sense; and influence. Both are for sale in Africa.

Sackerson said...

Yes to the second sentence.

I'm not directly connecting the bond sales with gold purchases - though that wouldn't be such a bad idea. But as the yuan seems destined to appreciate against the dollar, there is a question of why China should make all those things for America and get paid in shrinking money. I shall have to start looking at China's developing trade with its neighbours, and it own emerging middle class - the danger point come when China no longer needs the US: "He who cares least has all the power."

And what is the UK doing as the third biggest buyer of US bonds? Are we taking up some of this fresh slack? Are we a bit touched?

As to gold, just how much do these world government actually have gleaming in their vaults? And how many empty shelves with IOUs tacked to them? Has the US been flogging gold to pay bills (or to stabilise the price of money - not the price of gold)?

Gold may be a barbarous relic, but when the man in the street realises that he's getting paid in notes from the Bank of Toyland, he's going to look around for *something* with intrinsic value.

I must get some trays of baked beans. Loo rolls. Razors. Soap...

How do you like the Chinese computer hackers story? Looks like they're getting a bit over-eager on knowledge transfer.