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Will China dump us treasuries

edited May 14 in Off-Topic

A Chinese newspaper with ties to Beijing suggests China is studying whether to sell down its holdings of U.S. Treasury bonds.
Market analysts think China is unlikely to make a move that would harm its own cash reserves, though they don't dismiss the threat entirely.
Dumping Treasuries would likely raise borrowing costs for U.S. consumers and businesses, but it would also hurt the value of China's own Treasury assets, which top $1 trillion.

Major crash coming/Armageddon?


  • Hey ... if they do ... prices should fall with yields rising. And, with this, I would probally do a little buying.
  • edited May 15
    Just noted 2.38% on the 10 year this morning. Hardly seems like they’re worth owning at that low rate. You’d have to be, I think, very dour on the state of the global economy not to want to own something else - be it equities, high yield, collectibles or an apartment building. The latter should be necessary for human habitation until virtual reality figures out how to put a roof over our heads.

    Selling large quantities of anything tends to drive down the price. That’s one of the problems running a large fund. So China would need to tread carefully or stand to get burned unloading these along with the other holders.

  • The linked above CBSNews article comes from this May 10 write at the South China Morning Post . I didn't find any reference to source in the CBS write. At the below link, one will find a May 13 write, and just below is the Treasury's related story from May 10; although the May 13 article is more interesting, IMHO.

    Yes, I do read through portions of the SCMP publication.

    South China Morning Post

    @johnN You noted: "Major crash coming/Armageddon?" You should strongly consider learning as much as you can about trading futures, options and related; for equity, bonds and currency exchange. This knowledge could complement your equity and individual bond holdings to take advantage of wide market swings.

    Interesting, eh? how we individually view investment sectors. You're looking at bond yield increases to obtain the payment/gain from the yields; and I use the price of bonds as the investment gain objective. You'd be a potential buyer with higher yields, while I'd be a seller from the falling prices. I treat bond pricing like equity pricing; asking the question of what is going to cause a profitable price move.
  • @MFO Members: Here is some information on China and U.S. Debt.
  • edited May 15
    @_catch22: thx sir. will probably buy more if indeed crash. Probably need another house/wifey been bugging for the past 6 or 9 months and may get one if we have another marketdown turn -not in a hurry though.

    I did added some oil recently, may sit out for a little bit and probably buy more oil/energy bonds + long term index funds [VTI/sp500] if indeed another massive crash coming/after dust settles. too many variables now. although 401k/tsp still 80/20 distributions
  • I hope China does us a favor and sells all of their US treasuries. That would be their mistake!
  • @JohnN - What makes you bullish on oil? Just curious. I own a bit through a NR fund (PRNEX) but can’t really get a handle on what the future holds for oil. Seems to have made a short term bottom around the end of 2018. Curiously, hit $26 2-3 years ago. Folks with a good long term perspective would have done well.

  • @_hank hi sir... Middle East issues just speculations.. Probably short term sales
  • "be it equities, high yield, collectibles or an apartment building."

    @Hank: Having been there and done that (albeit a very small 4-unit building), I can testify from personal experience that the very last thing that I will ever do again is own anything that is inhabited by a disparate group of quarrelsome human beings.

    However, I can also testify (again from personal experience) that owning and leasing a small commercial property is a pretty good deal. In that, you're only responsible for the overall condition of the building, not for the fools who are occupying it.
  • edited May 15
    @_Old_Joe - hi sir do you have any books recommendations for commercial real estates /or apartment ownerships thank you. [being owners/manager etc]. been thinking about it long term, will be ownership maybe soon enough. WE hope to not meet any squatters. Any advises would be appreciated.

    Sounds like you have met many persons/renters and may have done a few evictions yourself. thankyou
  • @johnN- I'm sorry, but I really can't qualify as any sort of expert in this area. We owned a 4-unit apartment house in SF for three or four years, and believe me, that was long enough. We were lucky in that we bought at a good time, the market then got very hot, and we sold at a great time.

    The commercial property was a fluke- having sold the apartment house, we had a fair amount of investible cash on hand. My boss at the company where I worked invited us to join him and a friend in purchasing the building then occupied by another branch of our company. No mortgage- all cash. That was a sweet deal. We absolutely knew the details of the business occupying the property, and we were responsible for nothing other than the normal building maintenance. The monthly lease income was great, and was reinvested mostly in the mutual funds (which led us eventually to MFO).

    Good luck on your investments- I recommend small commercial if you get the chance.
  • @Old_Joe: Seems to me insider info here ! Good job !
    P.S. Probably not a big enough unit. 16 or 20 units would be better to even out the nuts & not nuts !!
  • China - please dump treasuries so I can buy them at a decent rate.
  • Hi @Mitchleg
    But, what becomes of all of the inexpensive loans supporting, new auto leases, auto (new and used) loans through banks/credit unions and fixed rate mortgage moving from 4% to say, 6%. And the student loans. A large cluster of loan types take a lead from the 10 year Treasury.
    Banks wouldn't mind as much at first, as they may be able to profit from a larger spread; until folks didn't want to or couldn't afford a loan at higher rates.
    Keep in mind, we now have a U.S. society that has become used to low borrowing rates for 10 years. Change will not be kindly accepted.
    NOTE: China is well aware of this possible disruptive circumstance.
  • edited May 15
    Old_Joe said:

    Having been there and done that (albeit a very small 4-unit building), I can testify from personal experience that the very last thing that I will ever do again is own anything that is inhabited by a disparate group of quarrelsome human beings.

    Having been a renter years ago (albeit on the other of the fence) I can see where that would be a real thankless job. disparate = perhaps desperate? dissolute? despicable? disheveled? depraved? disreputable? deplorable? decrepit? - or possibly all of the above?

    Of course, there are REITs which invest in such rentals. That’s more along the lines of my thinking. But since you bring it up, I met a fella (on a flight actually) whose sole retirement plan consisted of buying dilapidated rental units or houses, fixing them up (largely by himself) and than renting and managing them for retirement income. Had it all figured out. Seemed to enjoy the management angle. Said it was a more secure retirement than investing in stocks. Go figure. Different strokes ... ?
  • Disparate means "different in kind or not strictly comparable" ie comparing John Hussman's annual returns to those of Warren Buffet.
  • With respect to that apartment deal the tenants were disparate; I was desperate! :)
  • Old_Joe said:

    With respect to that apartment deal the tenants were disparate; I was desperate! :)

    Nice try. Looks like a solid D (grade) to me.:)
  • I got what he meant, readily.
  • disparate |ˈdispərit; diˈsparit|
    essentially different in kind; not allowing comparison : they inhabit disparate worlds of thought.

    • containing elements very different from one another : a culturally disparate country.

    noun ( disparates) archaic
    things so unlike that there is no basis for comparison.

    @hank: I'm appealing your "D" grade to the appropriate authority!
  • edited May 16
    Dear @Old_Joe,

    I am in receipt of your letter of appeal. I know you realize all my remarks in the thread re: you were intended in jest. However, if you want to know the truth, I think (for what it’s worth) that “Having been there and done that (albeit a very small 4-unit building), I can testify from personal experience that the very last thing that I will ever do again is own anything that is inhabited by a disparate group of quarrelsome human beings.” is an outstanding sentence.

    I’ll confess I hadn’t thought seriously about the meaning(s) of the adjective disparate you so skillfully wove into the fabric of your thought process. But it’s certainly a great modifier. I’ve checked with and found the following explanation:

    The trunk of some people's cars may contain items as disparate as old clothes, rotting food, and possibly a missing relative. Disparate things are very different from each other. Near synonyms are unequal and dissimilar. The adjective disparate is from Latin disparātus, from disparāre "to separate, divide," from the prefix dis- "apart" plus parāre "to prepare." Disparate in the sense of "very different" probably developed by association with the Latin adjective dispar "unequal, different."

    I’d imagine there are a great many Latino speaking people in the SF area. No doubt some inhabited your former rental. So it is indeed perfectly normal / appropriate that you would choose an adjective with Latin roots to describe your former tenants. Rather than assign a grade, I’ve decided to revert to the trusty old pass / fail method. Please rest assured you have earned a passing grade.

    Sincerely, hank
  • @hank- I knew that you were just kidding, but I wasn't sure that everyone recognized "disparate", since you don't see that word too often. It's funny with words... I certainly don't remember using "disparate" with any regularity, but sometimes as I'm putting together a sentence words that I don't commonly use just sort of pop up from... where?

    What I'm saying is that I don't really see that as a "skill"... more of an accident. Another example: "albeit". I certainly don't use that word in normal everyday conversation either. That one just popped in there too.

    In any case, "Disparate" is a pretty cool word. :)
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