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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Jim Willie CB who wrote (2686)	3/22/2004 5:24:15 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

China end-Feb forex at 415.72 bln usd, unchanged from Jan - Monday, March 22, 2004 6:11:05 AM BEIJING (AFX-ASIA) - China's foreign exchange reserves were 415.72 bln usd at the end of February, unchanged compared to the end of January, the People's Bank of China said It is the first time that China has not recorded a monthly growth in foreign exchange reserves since the central bank started to release monthly figures on its website in January 2000, excluding the 45 bln usd capital injection into China Construction Bank and the Bank of China in December last year China's foreign exchange reserves increased steadily in the last few years thanks to continuous trade surplus and foreign investment growth in China Speculation on the Chinese yuan to appreciate since the second half of 2003 triggered speculative inflows of "hot money", with China witnessing 12.5 bln usd in additional foreign exchange reserves in January China's huge foreign exchange reserves, the second largest in the world next to Japan, in turn triggered more anticipation for the country to revalue its currency But a rare trade deficit in February, which stood at 7.87 bln usd and the highest trade deficit since at least 1996, halted the growth in China's foreign exchange reserves growth China's foreign direct investments in February rose 3.9 pct compared with January, and the moderate foreign investments growth also helped China to maintain a stable foreign exchange reserves level. (1 usd = 8.3 yuan) ============================================================ China end-Feb forex at 415.72 bln usd Are reserves reserves or are reserves treasuries? Or are treasuries considered reserves such that we do not know? My intrepretation (which could be wrong) is they are sitting in 415B us$ cash Someone tell me how much they are holding in treasuries and then we can see. Even IF all of that is in treasuries, it will ONLY be sold as needed. Their balance of trade with the US allows them to buy STUFF like OIL without dipping into treasuries. That is my belief and if you can prove it wrong I will be happy to have learned something. At any rate I do not think either you or I knows the full picture here of their intent, but I will state again, trashing the US$ while they are pegged to it and holding Billions in treasuries does not make sense to me. Mish