Every time the United States suggests that China should allow their currency to float, and stop manipulating their currency, they tell the United States to “shove it” in so many words stating; the United States needs to stop printing money, stop telling China what to do, and get its own financial house in order. Our US leadership has to listen to this because China owns so much of our debt. Every time there is a little squabble at the G 8 or G 20, China again tells the US to mind their economic policy, and butt out of theirs.
China often goes into the world media and suggests that it will stop buying US treasuries, or dump them if the United States does not get with the program, stop printing money, stop deficit spending, and act more responsible. These idle threats usually appear in the media before one of the major conferences; an IMF meeting, the Davos convention, or a meeting of the minds with the BRIC countries, claiming that they will soon have their own currency to use as a reserve currency to trade amongst themselves, and with the rest of the world.
Now then, even when China threatens to do this, they always find a buy brics online way to buy US treasuries, and even if they don’t on the open market, they have sources in London that buy through different channels which are less than traceable or less than transparent shall we say. In other words it’s all for show, it’s all just talk – and the US dollar is not dead, and it is so greatly respected worldwide that China continues to buy it to hedge against their own failing financial policies, bad loans, and overheating economy – all the while manipulating its currency for an unbalanced and unfair trading advantage.
As China keeps threatening to dump treasury securities, even claiming to stop buying, they continue to buy US Treasuries through the back door. Indeed there was an interesting article last month, as there have been several similar findings over the last few years explaining what’s really going on. Reuters Business News reports “U.S. caught China buying more debt than disclosed,” by Emily Flitter on June 30, 2011, which stated;
“The rules of Treasury auctions may not sound like the stuff of high-stakes diplomacy. But a little-noticed 2009 change in how Washington sells its debt sheds new light on America’s delicate balancing act with its biggest creditor, China. The Treasury had concluded that China was buying much more in U.S. government debt than was being disclosed, potentially in violation of auction rules, and it wanted to bring those purchases into the open – all without ruffling feathers in Beijing.”