Reply to: Will China start unloading US bonds / dollars?

[EternalOptimist]

There are two types of people
The first will sell their dollars
The second will hold on to theirs.

In a couple of weeks, one lot will be hailed as geniuses, the others as world class idiots. The genii will go on to write books and appear on breakfast tv. The idiots will moan about how they forgot the basics.

[lukemg]

Opportunity to buy on the dips ? I find myself with a significant cash position at the moment and I am steadily buying index trackers as the market drifts lower. Kept some powder dry too which I will wedge in on any big steps down.
They will not default, they will bounce the ceiling after the posturing has been done and points made.

[suityou01]

Touché

Are you still working in Germany?

No, so you can't nip up to Gutersloh and "pop a cap in ma ass"

I agree with you about the house of cards. It is driving the layman that pays attention to the point of distraction just not knowing.

The one rather sobering thought I had last night was "there must be a reason no one cares". Perhaps the timeline is set, and the powers that be just keep pumping up the tyres when they go flat no matter how many times they have to pull over and do that as they know they will still reach their destination in time.

For your benefit, the metaphor above describes the bicycle with punctures as the global economy and the elite as the cyclist. When the cyclist reaches his destination the bike is discarded.

[scooterscot]

How are you this thick?

Touché

Are you still working in Germany?

[scooterscot]

Put in simple terms for PooperScooter :

1) China can't sell off it's USD without triggering a financial collapse.
2) America can't default without triggering a financial collapse.

Anything outside these known truths is unthinkable.

HTH

Was it not Aristotle who once said " The Law is reason free from passion", in this instance the law is physics applies. We all know the house of cards cannot be an infinite structure, they've got to collapse sometime. And repeating it can't happen because of the consequences that would result is really deserving the attention of natural selection to wield it's sword to protagonist & observer alike.

[suityou01]

No it was not. It was my thinking China would be less worse off to act now, than do nothing. The alternative is to continue having a gun pointed at your head.

How are you this thick?

[scooterscot]

Obviously if the US defaults then all bets are off. I didn't think the original question was "if the US defaults, will China start selling its treasuries?"...

No it was not. It was my thinking China would be less worse off to act now, than do nothing. The alternative is to continue having a gun pointed at your head.

[suityou01]

Put in simple terms for PooperScooter :

1) China can't sell off it's USD without triggering a financial collapse.
2) America can't default without triggering a financial collapse.

Anything outside these known truths is unthinkable.

HTH

[Freamon]

Why is it automatically assumed to be a closed system incapable of change? The point is they might not have a choice if, a big if, the US defaults. They can be first, be smarter, or cheat.

Wind the clocks back, the 11th hour 2007, ordinary joe walks up to Fred of RBS and says "Look, you've got to sell all US mortgage securities, do it, do it now" Fred says "You're mad, those debts have triple A ratings, nothing beats owning US debt"

Then wham. All I'm saying is the probability the US will not default is no longer 0%.

Obviously if the US defaults then all bets are off. I didn't think the original question was "if the US defaults, will China start selling its treasuries?"...

[scooterscot]

Why would they risk weakening the dollar by unloading their stash?

Why is it automatically assumed to be a closed system incapable of change? The point is they might not have a choice if, a big if, the US defaults. They can be first, be smarter, or cheat.

Wind the clocks back, the 11th hour 2007, ordinary joe walks up to Fred of RBS and says "Look, you've got to sell all US mortgage securities, do it, do it now" Fred says "You're mad, those debts have triple A ratings, nothing beats owning US debt"

Then wham. All I'm saying is the probability the US will not default is no longer 0%.

[Freamon]

China's economy is built on the strength of the dollar. They dont care what their US Treasuries are worth, as long as their exports continue to look cheap. Why would they risk weakening the dollar by unloading their stash?

[scooterscot]

You would think the Chinese would have hedged their USD exposures though. They arent punting, like Suity does.

No they're not; who'd want a trading partner where one of them keeps the other's balls in a vice?

[aussielong]

If the US defaults, if, then the Chinese will find themselves sitting on a pile of paper worth about as much. Bugger if I'd be sitting on me hands doing nothing about the situation.

Why of why the US still maintains a AA+ credit rating when it's potentially 10 days away from default is beyond me.

You would think the Chinese would have hedged their USD exposures though. They arent punting, like Suity does.

[eek]

When the news of the shutdowns hit the market, everyone panicked and bought...........US govt debt.

Safe haven.

Yep, the markets are mad. People worried about the collapse of the US buying US debt as it's the ultimate safe haven.

No where else to put your money. At least with US Treasury bonds the only issue is that you may or may not get your money back. With anything else there is a risk that they may or may not get the money fred bloggs owes them so there may be bigger risks...

but yes its utterly insane....

[DimPrawn]

When the news of the shutdowns hit the market, everyone panicked and bought...........US govt debt.

Safe haven.

Yep, the markets are mad. People worried about the collapse of the US buying US debt as it's the ultimate safe haven.