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China Cuts Back on Buying US Treasuries

Executive Summary – The figures for Dec. 2009 show China spending $34.2 billion dollars less for US Treasuries than it did in Nov. 2009. In total foreign holdings of US Treasuries fell by $53 billion in Dec. 2009. Japan cut holdings by $11.5 billion in Dec. 2009. In Nov. 2009 the total foreign aggregate amount of purchases of US corporate bonds and US Treasuries was $126.4 billion. In Dec. 2009 this amount dropped to $63.3 billion. In Feb. 2010 China has directed its banks to only invest in US government-backed instruments so these numbers will be dropping.

China is driving the dollar up so it can dump the dollar at an advantageous rate of exchange. Watch the dollar go up in the short term (12-18 months) and then the bottom will fall out as the Chinese stop buying any US instruments. They will at this point have killed most of the demand for the dollar. Russia will probably follow a plan of their own with a similar goal. Obama has intensified the cold war with Russia and China. Obama gets no respect from anyone and they are going to drop the dollar in return for his idiotic war mongering with missiles pointed at Russia and China located in neighboring countries. Way to go Obama.

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