• If you are having problems logging in please use the Contact Us in the lower right hand corner of the forum page for assistance.

Is China quietly dumping US Treasuries?

Steve

Well-known member
MOGal
Is China quietly dumping US Treasuries?

don't expect a quick sell off,... Now, there's a comfort... China won't sell them because "China would not have anyone to sell the securities to"

So instead of accumulating more Treasuries, China is plowing U.S. dollars into inflated U.S. stocks, agencies (tied to horrendous fundamentals in the U.S. housing market), junk bonds, and other garbage.

Why is it that foreigners always buy market tops (first Treasuries, now equities)? Regardless of the answer to that last question, there's always a buyer at the right price. That holds true for housing, Treasuries, and even CDOs.


There’s no denying that China has cut back on Treasury purchases. In fact, avoidance of U.S. Treasuries in now approaching a near mania everywhere, even as funding can easily be found for the junkiest of junk offerings (not related to housing). But is there any reason for China to do a wholesale dump? I personally doubt it.

selling investments (or treasuries) requires that you find a buyer willing to pay you money..

so in effect China would lose money if it sold treasuries, the dollar is worth less, the treasuries are worth less....

add in China's sub-prime losses,..and it will be hard to see who the bigger loser is US or China...
Chinese state lenders, including the Bank of China, are expected to announce losses from their exposure to the US subprime lending market,...

care to "prove me wrong",.. MoGal?
 

Sandhusker

Well-known member
If you look at the prices of the 30 year for the last twenty years, you'll see that the prices are about in the middle of the range.

If the Chinese are selling at a loss, that doesn't necessarily mean they're going to take it in the shorts. They may think prices are going to go down, thus selling would be cutting their losses or they may just have a better investment somewhere else. Sometimes taking a small loss today can be the best move you can make.
 

Steve

Well-known member
SandHusker
Sometimes taking a small loss today can be the best move you can make.

I agree, but it seems as if there are two lines of thought on this,.

The MoGal conspiracy theory line...that china will collapse our economy...

Having heard the same about Japan, I am more willing to look past the hype, and find the truth... China is one of our sources of cheap (loan) money and is going to take a healthy hit in the sub-prime fallout... so as with any investment country,..our loss often is felt there as well...

as for the other line of thought and more likely...China sees that they have made some miscalculations in investing in our economy,..(ones that are costing them),..and are adjusting that investment policy...

Wonder why MoGal again failed to defend her "link" that seemed so important????

MoGal Pasteing a link is easy ,...thinking takes a little effort..care to respond?
 

MoGal

Well-known member
Well, I 'm sorry I can't spend 24/7 on here and with dialup at a piddly 19.2 kbs it takes me a while to get anywhere.... lol

Do you see that the dollar is plunging? As the article stated, when foreign investors start withdrawing from USA markets, then they are investing in other markets (whether the Japanese or gold, etc... a more stable commodity).

In case you haven't noticed but groceries have gone up 20-25 percent in the last 45 days (and this is just an example) but when the dollar starts collapsing its going to take more dollars to buy the same product. Milk is now $4.00 gallon ($3.71 to $3.81 plus tax) and let me tell you when it hits $6.00 gallon old MoGal is gonna start milking the hubby's holstein. I'm not paying it, but what about the person who doesnt have a milk cow?

Now, we're shipping cows today so I'm going up to help the hubby and I may not be back on until later.

Think on these thoughts:

Similarity to 1929 Stock market crash

“The more that Hoover and the Fed tried to inflate, the more worried the market and the public became about the dollar, the more gold flowed out of banks, and the more deposits were redeemed for cash.” So the Federal Reserve can print money, but it cannot create credit or confidence. ‘Money’ is therefore hoarded, by either the public or the banks themselves (if they are concerned about an increase in redemptions).
 
A

Anonymous

Guest
So the Federal Reserve can print money, but it cannot create credit or confidence. ‘Money’ is therefore hoarded, by either the public or the banks themselves (if they are concerned about an increase in redemptions).


Right there is the problem that I don't think the Fed or our Administration see or want to admit-- the folks out in the real world that are having to buy the cars, the tractors and equipment, the food, the gas, the fertilizer, the clothes, the insurance, etc., etc. do easily see that the Administrations 2% inflation is a farce and flat out lie-- and that has lead to a loss of credibility of the Administration and is leading to less and less confidence in the economy....

And the more money they print and stick out there to prop up a false stock market- just creates that much more inflation and lack of confidence to the folks in the "real world"....
 

Steve

Well-known member
“The more that Hoover and the Fed tried to inflate

Most economists agree that Fed policies in the wake of the crash were incredibly wrong policies that led to a banking crisis in 1930 and 1931.

Hoover deeply believed in the Efficiency Movement (a major component of the Progressive Era), arguing that there were technical solutions to all social and economic problems.

Bored with making money,...Hoover was very anxious to be of service to others.,...Hoover led five hundred volunteers to pass out food, clothing, steamship tickets and cash. "I did not realize it at the moment, but on August 3, 1914 my career was over forever. I was on the slippery road of public life."

Hoover was touted as a possible Democratic Party presidential candidate in 1920 by some party leaders,..

but Hoover could foresee that 1920 would be a Republican year, and he had no desire to tie himself to a party that was destined for defeat, and thus could accomplish little (Hoover had been a registered Republican before the war, but was briefly willing to join the Democrats in 1920;,..

(So in effect Hoover was one of the First Neo-Cons)..

In 1930, although he had opposed its passage, Hoover signed the Smoot-Hawley Tariff Act, which raised tariffs on over 20,000 dutiable items, despite the protests of economists. Major trading partners, like Canada, immediately retaliated. The tariff, combined with the 1932 Revenue Act, which hiked taxes and fees across the board, is often blamed for deepening the depression. It brought on a wave of retaliation and choked world trade.

In order to pay for these and other government programs, Hoover agreed to one of the largest tax increases in American history

Moreover, the Federal Reserve System's tightening of the money supply (for fear of inflation) is regarded by most modern economists as a mistaken strategy, given the situation.

So in effect it wasn't "printing more money" ,,but the tightening of Money by the fed, that "created the panic"...

when you get time..an interesting article..
http://en.wikipedia.org/wiki/Herbert_Hoover
 

Steve

Well-known member
MoGal
Well, I 'm sorry I can't spend 24/7 on here and with dialup at a piddly 19.2 kbs it takes me a while to get anywhere.... lol

I totally agree that few of US can spend 24/7 on here...

I usually grab a few minutes through out the day...

Thats, why I came down on you about your cut and Paste.

Sorry if it actually takes time and effort to think,..

It would be near impossible to respond to them all, and most were wrong... and I knew that convincing you on every front was futile..

Just like this...thread..


China will not collapse our economy..(we might),,..but they like Japan in the past are no different then any other aggressive business country,..

I remember when the same was said about Japan. now we are concerned about China...good, but each of US must make a decision to "support the US economy"...because the Government won't tell you which toy to buy...

as for Hoover...he was a democrat in republican party clothes. (a NEO-CON if you will)... his direction of the fed was wrong, his policy was wrong.. but he meant well...

But what is happening now is not the same as then...Many Americans have no money in the bank...it's wrapped up in their house and the stock market...Both are safe as long as your not over-extended...

Most of the same risky investment in the sub-prime-Housing are by the same types who invested in the Internet/tech bubble...for them it's like gambling...risky, rich, investing with huge returns...until it crashes in a hand of aces and eights....

as for the price of Milk...1.85 a half gallon..didn't seem to high.. but then again Milk isn't often imported... and the thread was about China and treasuries... try to stay on task..LOL,..after all, it is really "your thread"...


price inflation makes US make choices... and Americans seem to like to bitch and whine more then making choices..
 

Cal

Well-known member
Good job Steve. I would actually be more worried if there were 1.3 billion hungry Chinese not involved in US and world trade, versus the overall modernization and form of capitilism that has evolved instead.
 

MoGal

Well-known member
But what is happening now is not the same as then...Many Americans have no money in the bank...it's wrapped up in their house and the stock market...Both are safe as long as your not over-extended...

But that is the problem, too many Americans are overextended, wages have decreased since the 1970's and corporations are raking in billions of profit and not "trickling" it on down to the worker who is the consumer of USA. IF businesses had to pay the same amount of taxes that the regular American does, IF we had a Wage Equalization Tariff so that those companies who went overseas for cheap labor would not have done so. JOBS in America is what keeps the economy going.

Unfortunately, many Americans fell into the trap of living above their means instead of below their means (there again easy credit) many who lost a good job was only able to get one with half the pay and they tried living at their old income.

I'm sorry the milk example went over your head, but inflation is what I was talking about. Consumer confidence is going down and that will affect what is purchased. PLUS it will take more dollars to purchase the same item. The increase in costs to purchase an item, but no increase in salary.

Countries outside the USA have already been questioning the stock market activities but to no surprise the Federal Reserve (which is not owned by the government but by central bankers) has remained...... silent. Their silence and refusal to correct the problem has caused other countries to start pulling back, because although their currency is based on the dollar, they realize the dollar is worthless.

Many countries have already requested to be paid in Euros, not dollars.
 

Cal

Well-known member
MoGal said:
But what is happening now is not the same as then...Many Americans have no money in the bank...it's wrapped up in their house and the stock market...Both are safe as long as your not over-extended...

But that is the problem, too many Americans are overextended, wages have decreased since the 1970's and corporations are raking in billions of profit and not "trickling" it on down to the worker who is the consumer of USA. IF businesses had to pay the same amount of taxes that the regular American does, IF we had a Wage Equalization Tariff so that those companies who went overseas for cheap labor would not have done so. JOBS in America is what keeps the economy going.

Unfortunately, many Americans fell into the trap of living above their means instead of below their means (there again easy credit) many who lost a good job was only able to get one with half the pay and they tried living at their old income.

I'm sorry the milk example went over your head, but inflation is what I was talking about. Consumer confidence is going down and that will affect what is purchased. PLUS it will take more dollars to purchase the same item. The increase in costs to purchase an item, but no increase in salary.

Countries outside the USA have already been questioning the stock market activities but to no surprise the Federal Reserve (which is not owned by the government but by central bankers) has remained...... silent. Their silence and refusal to correct the problem has caused other countries to start pulling back, because although their currency is based on the dollar, they realize the dollar is worthless.

Many countries have already requested to be paid in Euros, not dollars.
Alot of your claims are verifiable through obscure sources at best. Credit card debt is not a widespread nationwide problem, and living standards are much better now than in the '70s. I'm geussing maybe you weren't even born then.

Which corps are raking in billions and not paying taxes? GM, Ford, Chrysler, the airlines? No, your darling labor unions parasitical activity lets them barely survive. Big Oil? The government makes several times per gallon in taxes more than they do. There are also many times that the oil companies do not rake in the profits....I'm sure that doesn't matter though, they're only supposed to operate for the good of the country. Right?

The populations in this country that are increasing the poverty level are illegal aliens, young single parents, and hardcore drug addicts. A good job of patroling our southern border would likely help all three.
 

Sandhusker

Well-known member
Actually, we do have a huge problem with credit card debt in this country. The "average" family has $9000 in credit cards, and need I mention anything about the rates?

I see it everyday. Everytime somebody applies for a loan or renews, we pull a credit check. Finding a credit report without any cc debt is unusual. I have no problem believing the $9000 figure.
 

Cal

Well-known member
Sandhusker said:
Actually, we do have a huge problem with credit card debt in this country. The "average" family has $9000 in credit cards, and need I mention anything about the rates?

I see it everyday. Everytime somebody applies for a loan or renews, we pull a credit check. Finding a credit report without any cc debt is unusual. I have no problem believing the $9000 figure.
Only 8.3% of households owe $9000 or more on their cards.
http://ranchers.net/forum/viewtopic.php?t=20623
 

Steve

Well-known member
MoGal
But that is the problem, too many Americans are overextended,


NO one made any one "over-extend",

Is it China's fault that some families feel the need to have a big screen TV?
Two homes?

several cars?

and how is that the Government problem?

why should corporations be taxed so families can have "more"
 

Steve

Well-known member
MoGal
wages have decreased since the 1970's

Household income over time

Please note that all figures are presented in 2003 dollars.

Since 1967, the median household income in the United States has risen by 31%, fluctuating several times. The rise in household income is largely the result of an increase in personal income among college graduates, a group that has doubled in size since the 1960s, and women entering the labor force. Today, 42% of all households have two income earners. Household income increased dramatically faster for affluent households with income inequality having increased steadily since the 1970s.

Overall, the median household income rose from $33,338 in 1967 to an all-time high of $44,922 in 1999, and has since decreased slightly to $43,318.

stagnation in median household income may, in fact, be largely a reflection of changes in the size and composition of households rather than a reflection of a stagnating economy."- John McNeil, US Census Bureau

Facts show that household income has increased...since 1970.

as for the "poor",..this is the official definition...Those who live below the poverty line with limited to no participation in the labor force.

Maybe getting a job would help them not be poor...

http://en.wikipedia.org/wiki/Household_income_in_the_United_States
 

Sandhusker

Well-known member
Cal said:
Sandhusker said:
Actually, we do have a huge problem with credit card debt in this country. The "average" family has $9000 in credit cards, and need I mention anything about the rates?

I see it everyday. Everytime somebody applies for a loan or renews, we pull a credit check. Finding a credit report without any cc debt is unusual. I have no problem believing the $9000 figure.
Only 8.3% of households owe $9000 or more on their cards.
http://ranchers.net/forum/viewtopic.php?t=20623

You have one person saying one thing and one saying another. Who are you going to believe? I believe the person who's story matches my personal observations.
 

Sandhusker

Well-known member
"Since 1967, the median household income in the United States has risen by 31%, fluctuating several times. The rise in household income is largely the result of an increase in personal income among college graduates, a group that has doubled in size since the 1960s, and women entering the labor force. Today, 42% of all households have two income earners. Household income increased dramatically faster for affluent households with income inequality having increased steadily since the 1970s.

Overall, the median household income rose from $33,338 in 1967 to an all-time high of $44,922 in 1999, and has since decreased slightly to $43,318.

It looks to me that the reason household income has risen is because there are two people working instead of one. I'd like to know how many households had two earners in 1967 - that's the key to interpreting if any real gains were made or not.
 
A

Anonymous

Guest
Since 1967, the median household income in the United States has risen by 31%,

That was 40 years ago-- and if inflation was only 1% per year that means the median income went backward-- and we know that some years in that time period inflation was even over 10%....
If you took just the reported inflation during that time period- 189%- that would be a huge decrease in buying power of those incomes- but then add in the fact that starting with Clinton and continuing with GW, they have been cooking the books leaving many things out of the inflation rate (like gas, health insurance, etc...)--and true inflation right now is running closer to 6-8%--you are looking at well over 200% loss of buying power for the median household..

1967 2.78
1968 4.27
1969 5.46 Nixon
1970 5.84
1971 4.30
1972 3.27
1973 6.16
1974 11.03 Ford
1975 9.20
1976 5.75
1977 6.50 Carter
1978 7.62
1979 11.22
1980 13.58
1981 10.35 Reagan
1982 6.16
1983 3.22
1984 4.30
1985 3.55
1986 1.91
1987 3.66
1988 4.08
1989 4.83 Bush, G.H.W.
1990 5.39
1991 4.25
1992 3.03
1993 2.96 Clinton
1994 2.61
1995 2.81
1996 2.93
1997 2.34
1998 1.55
1999 2.19
2000 3.38
2001 2.83 Bush, G.W.
2002 1.59
2003 2.27
2004 2.68
2005 3.39
2006 3.24
 

Steve

Well-known member
MoGal
I'm sorry the milk example went over your head, but inflation is what I was talking about.

It didn't go over my head...I thought the post was about China dumping US treasuries...

Maybe you could explain how the causes of Inflation and Milk prices, are tied to china dumping our securities,

Price inflation now is largely due to energy costs increasing..

in your first paragraph you complained about 8 separate topics none of which had any thing to do with China and the treasuries...(maybe it wasn't as important as you said???)

1.too many Americans are overextended.

(not my fault, nor chinas', nor the Government)
Would you like the government to control your credit?

2.wages have decreased since the 1970's
(false disproved.)

3.corporations are raking in billions of profit.
Some are, others just went belly up..

4.corporations are raking in billions of profit and not "trickling" it on down to the worker

this is a good topic...but it would take me at least a week to explain why corporations exist, and why your socialist idea would fail..

5.not "trickling" it on down to the worker who is the consumer of USA.

Refer back to #1, it appears the workers have been spending up a storm... household wages are increasing,..and those that are working are improving their lives..

6.IF businesses had to pay the same amount of taxes that the regular American does,

Most corporations are taxed, often the same "income" is taxed as a corporation, and as dividends... but again it would take "forever to disprove and teach you that your socialist plan would drive more corporations out of this country...and they would take their money with them...

7.IF we had a Wage Equalization Tariff so that those companies who went overseas for cheap labor would not have done so.

they would just "move"..and take their money with them...

8.JOBS in America is what keeps the economy going.

Yes they do,...but maybe instead of complaining why the job, look at the root cause... if every time you bought a product, and actually looked at where it was produced and made investments in American business. what kind of car do you drive?,..computer?...fridge?...every purchase adds up.
maybe a look in the mirror would solve that one...

and that was just the first paragraph...oh well at least your "thinking"...

You have alot of complaints.. and I think that many are valid.
But many of your complaints are paradoxes at best...and flat out contradictory.

Taxing our business and making it more expensive to operate in this country only forces companies that want to survive to re-locate..

blaming business for Americans inability to control their own budgets is like Blaming China for loaning them the money...

Business are in Business to "sell products"...not employ people.
Banks loan out money... not provide free services for savers...

Knowing why a business is in business is the first step to understanding why your wanting to tax them, would result in them leaving...and thus the loss of American Jobs..
 

Steve

Well-known member
OT
That was 40 years ago,...and if inflation was only 1% per year that means the median income went backward-

Sorry I should have been MUCH CLEARER.

Please note that all figures are presented in 2003 dollars.

The figures provided were "ADJUSTED for INFLATION"



While per-capita, disposable income has increased 469% since 1972, it has only increased moderately when inflation is considered. In 1972, disposable personal income was determined to be $4,129;(or) $19,385 in 2005 dollars. In 2005, disposable personal income was, however, $27,640, a 43% increase. Since the late 1990s, household income has fallen slightly.
(thus since 1967 the median household income in the United States has risen by 31%,)

I took the more moderate "household income figure"...instead of the more accurate "disposable personal income figure",..

no matter how you slice it Americans have more now, then in 1970
 
Top