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23skidoo

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26/01/18

16:25

Post #: 30593140
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Originally posted by Crom Valen ↑

So the US Treasury is looking to ramp up debt issuance - double it! - to cover the ever expanding deficits, and the Chinese are looking to step away from buying it. (And the Fed are too!)
I remember those comments of Trumps where he was saying that debt holders are the ones with the problem & if it came to a default, debt holders would get pennys in the dollar. Is it any wonder that the Chinese would say "You want us to buy your debt, finance your military, finance your first world lifestyles - and you want to talk about 'pennys in the dollar', and moreover start a trade war?? GAGF!!!!"

This is just the beginning. The chumps that pest around this forum cockling on about "Oh, the debt doesn't matter" - they will be shown up. Sometimes we can't see what is just over the horizon, but I know that hubris gets punished, and this is just another example of it.

https://www.thefiscaltimes.com/2018/01/23/Bond-Dealers-Prepare-Surge-US-Debt-Sales

By Michael Rainey

January 23, 2018

U.S. budget deficits are expected to grow sharply over the next few years, and bond dealers are preparing for a big increase in debt sales by the Treasury Department as result.
Debt issuance is expected to double in 2018 on a year-over-year basis, to more than $1 trillion, the highest level since 2010, according to Bloomberg.

All that extra debt should drive bond prices lower and interest rates higher, as the Treasury seeks to attract investors.

https://seekingalpha.com/article/4137514-warning-bell-china-may-stop-buying-u-s-debt

Yesterday, Bloomberg reported China may slow or even stop its purchase of US Treasuries. In other words, a major source of US government debt financing may be pulling out. This comes at the same time the Federal Reserve has committed to shrinking its balance sheet.
"The Chinese are applying pressure to the Treasury market just as the (Federal Reserve) is about to step away from being the buyer of last resort," FX strategy at BK Asset Management managing director Boris Schlossberg told Bloomberg.

Expand

"Bloomberg reported China may slow or even stop its purchase of US Treasuries. In other words, a major source of US government debt financing may be pulling out. "

This would mean that the US would have to pay for Chinese goods with hard currency or (perish the thought!) gold.
Instead of buying everything on the ever growing 'tab'.
China might even ask for payment in Euros or even (gulp!) Yuan.
How could Uncle Sam handle that!!!
23.
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