Preparing for More Big Ones
“The debt markets have been warned…
‘The incremental parts of our foreign reserve holdings should be invested in physical assets… we will liquidate (U.S. Treasuries)…when…’
To my knowledge, this is the first time that a top adviser to China’s central bank has uttered the word “liquidate.”…
The Chinese are clearly vexed with Washington, viewing the Fed’s QE as a stealth default on US debt. Mr Li came close to calling America a basket case, saying the picture is far worse than when Ronald Reagan and Margaret Thatcher took over in the early 1980s.”
“China to ‘liquidate’ U.S. Treasuries, not dollars”
Ambrose Evans-Pritchard, The Telegraph, London, 9/16/11
The Chinese, by some accounts holders of over $2 Trillion in U.S. Treasury, agency, and other debt, are clearly fed up with the Fed’s dollar debasement policies, which erodes the value of their 2 trillion worth of U.S. dollar holdings.