China purchased $200B more of U.S debt in 2008, total of $696.2 billion.
By Daniel at 23 March, 2009, 3:18 pm
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China increased its holding of US national debt by over $200 billion in 2008, according to figures from Treasury International Capital (TIC), the reporting system of the US Treasury. By the end of December, China’s holding of US national debt had increased by $14.3 billion over the end of November to $696.2 billion. China continued to be America’s largest creditor, followed by Japan.
China and the UK increased their holdings of US national debt by $218.6 billion and $197.1 billion, while Japan cut its holding by $1.6 billion.
Although still holding US national debt, some holders have begun to adjust portfolio structure by increasing purchases of short-term bonds and cutting long-term bonds. This trend changed slightly in December, when foreign investors net bought $34.8 billion of US long-term bonds and net increased US short-term bonds by $25.3 billion at the same time.
But China continued to net buy short-term US national debt and sell agency bonds with higher risk in December. By the end of December, China net bought $3.704 billion of short-term bond and net sold agency bonds worth $2.468 billion.
http://www.chinastakes.com/story.aspx?id=1008
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That is why many people say “watch the bond market” if you want a better gauge of what is going on.
Also, note that amount they lent to us in a year. Yet, we want $2.2 to $2.5 trillion. There isn’t nearly enough money in the world to lend us what we are spending.
I guarantee that before the Fed announced it’s “buy treasury” plan, they had plenty of long talks with China to beg their permission to do so first.
China will continue to prop up the US until it can no longer buy its goods. If they cut us off too early, they essentially kill the golden goose. The question is, how much exposure will they continue to accept.
In fact, I guess China looks on the U.S. as “TO BIG TO FAIL”. LOL
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