China losing taste for debt from U.S.

January 8, 2009 by · Leave a Comment
Filed under: Global News 

It is not just China that is losing their appetite for U.S. sovereign debt, its basically the whole world that is fed up.  The world is not going to sit back with all its problems and fund us to be the consumers of the world.  That is not the path to global prosperity.

You don’t have an island with a bunch of people with limited resources and then assign one guys jobs as the person who eats.  It makes no sense and it won’t stand my spotlight or public opinion over time and that is what counts.

News:

China has bought more than $1 trillion of American debt, but as the global downturn has intensified, Beijing is starting to keep more of its money at home, a move that could have painful effects for American borrowers.

The declining Chinese appetite for United States debt, apparent in a series of hints from Chinese policy makers over the last two weeks, with official statistics due for release in the next few days, comes at an inconvenient time.

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Pimco limiting U.S. Treasuries exposure as supply builds

November 5, 2008 by · Leave a Comment
Filed under: Currency News 

Good move on their part.  With the amount of issuing that is going to take place over the next 12 months, I would not want to have too much into treasuries.  Many economist are calling the dollar, “the next bubble to burst”.   Now with President-elect Obama, he needs to get serious about creating jobs in our country.  

I would say infrastructure in our highway system, transportation (rail) and energy should be his priority in reverse order.   These type of projects are great for creating jobs.  I would also do a mix of federal programs and private programs through our bidding process will be a nice balance.  I think we are going to start seeing inflation pick up as soon as people start feeling more confident and that will be are next major crisis.  You really notice inflation when the velocity of money speeds up through economic activity.

Release:

Fund manager Pimco is limiting its Treasury holdings amid expectations the United States will ramp up issuance to pay for a slew of new programs aimed at easing the credit crisis, Chief Executive Mohamed El-Erian told Reuters late Tuesday.

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China dumps $3 billion of US treasury bonds

August 18, 2008 by · Leave a Comment
Filed under: Economic News 

Well there you go, the next leg of the dollar dropping is upon us.  We can not run a trade and account deficit of this proportion and bailout the commercial banks, homeowners, investment bank, GSEs and expect foreigners keep keep funding our debt and consumption.  All parties come to an end and I hope you have your chair reserved.

Release:

As of June, China held $503.8 billion worth of US treasury bonds, $3 billion less than in May, according to a report released by the US Department of the Treasury. This is the first time since February that China has cut its holding in the US government finance department.

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Fewest U.S Treasury Traders Since 1960

August 3, 2008 by · Leave a Comment
Filed under: Industry News 

Bloomberg reported that we have the fewest primary government securities dealers since 1960. I wonder what kind of added volatility this will bring as we do our open market operations of selling U.S. government securities?

This also could just be because of consolidation of the years, maybe once the investment banks gets more concentrated we will see a time when different acquisitions will be spun off and we will see more primary dealers? Time will tell what this is an indication of. Here is some of the article.

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