https://www.cbsnews.com/news/us-china-tariff-what-would-happen-is-china-dumps-u-s-treasuries/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?
Comments
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.
@Old_Skeet
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.
Regards,
Ted
https://www.thebalance.com/u-s-debt-to-china-how-much-does-it-own-3306355
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
@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.
Sounds like you have met many persons/renters and may have done a few evictions yourself. thankyou
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.
Derf
P.S. Probably not a big enough unit. 16 or 20 units would be better to even out the nuts & not nuts !!
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.
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 ... ?
adjective
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!
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 Dictionary.com 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." https://www.vocabulary.com/dictionary/disparate
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
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.
China’s US$1.12 trillion holdings account for just 5 percent of total US national debt, which may mean any material damage on the US economy stemming from a bond sales would be limited. In addition, even if it did cause market volatility, China’s remaining holdings would also be hurt, which the Chinese may view as a move that is too risky
The trade-cheating Chi-coms can only pull that trigger once. The better question is "what would POTUS' policy reaction be to that action?"
https://www.washingtonpost.com/opinions/are-we-at-risk-of-a-chinese-dollar-dump/2019/05/26/4c46a938-7e4f-11e9-a5b3-34f3edf1351e_story.html