China Sends Warning to Bonds and Dollar
Monty Guild
Dear CIGAs,
According to the US Treasury/Federal Reserve Board, as of September 2008 US government debt was held by the following countries.
The biggest three owners of US Treasury bonds are:
1. China - $585 billion
2. Japan - $573 Billion
3. United Kingdom - $338 billion
In this light the announcement that was made today in the English language official organ of the Communist party, the China Daily, is particularly thought provoking. "China’s increased purchase of US Treasury securities should not be interpreted as an endorsement of the assumption that the US can borrow its way out of the current financial crisis…”
This follows an announcement made about 2 weeks ago by the head of China’s sovereign wealth fund to the effect that the current high value for the US dollar might not continue.
Perhaps the Chinese are sending a warning that might be attended to.
Your pal,
Monty Guild