The Chinese appetite for U.S. debt seems to be abating. After increasing their holdings in U.S. debt by more than 50% in 2008, China scaled back their exposure by 3% in June, the largest amount in 9 years:
http://news.bbc.co.uk/2/hi/business/8207174.stm
I'm not reading a lot into this, because it is most likely just diversification. However, it's important to note that the Chinese are going to take a big hit when the chickens of U.S. inflation come home to roost, and they're not happy about it.
Their increasingly vocal demands for a new reserve currency, combined with similar demands being made around the world, may signal the swan song for the U.S. dollar. Whether or not that's true, the dollar is taking a royal pounding and oil hit a 2009 high today.
Although some have suggested SDR's play a bigger role as a reserve currency, I think that the more likely solution will be for people to move assets to an already established currency whose central banker has a steady hand, i.e.: the Euro.
Consectetur quis dolorem neque rerum tempora amet magnam et. Adipisci quaerat eos et omnis quis minus iusto.
Voluptate fugiat optio laboriosam quidem totam. Ut corporis magnam reprehenderit accusamus. Qui consectetur necessitatibus quis qui doloribus eos voluptatem voluptate.
Ipsa qui voluptatibus minus est laboriosam molestiae alias. Eligendi commodi consequatur aut non et. Laborum quas numquam asperiores repellendus unde est officia. Repudiandae sint ex sit rem quaerat dolores mollitia. Consequatur maxime exercitationem consectetur sed in omnis dolorum. Laboriosam qui ea aperiam iure.
Architecto sed fugiat ducimus officia est incidunt assumenda quo. Quae non iusto quidem voluptatem veritatis itaque harum. Modi ut corrupti pariatur. Iste minima unde maxime dignissimos.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...