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Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives
SPY 671.910.0%Nov 14 4:00 PM EST

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Winfastorlose
To: Katelew who wrote (144991)5/7/2020 12:01:44 PM
From: the longhorn2 Recommendations   of 218828
 
Good question.

China has cut back about 10% on their treasury holdings over the past couple of years. But there are major reasons why they are unlikely to dump t-bills...at least as things stand now.

investopedia.com .

If I understand correctly, buying t-bills soaks up the dollars they accumulate keeping their currency rates low and the dollar high. This helps drive their export machine. This policy drives inflation and they have had problems as a result. But they have a tightly managed economy and have countered that with internal policies, various forms of relief and so on.

If we cap trade, continue to drive the imbalance down, and if there are growing US voices to reneg on our t-bill debt to China, you may see them change course.

lh
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