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View Full Version : U.S. lets China bypass Wall Street for Treasury orders



Dolphins9954
05-22-2012, 08:56 PM
(Reuters) - China (http://www.reuters.com/places/china) can now bypass Wall Street when buying U.S. government debt and go straight to the U.S. Treasury, in what is the Treasury's first-ever direct relationship with a foreign government, according to documents viewed by Reuters.
The relationship means the People's Bank of China buys U.S. debt using a different method than any other central bank in the world.

The other central banks, including the Bank of Japan (http://www.reuters.com/places/japan), which has a large appetite for Treasuries, place orders for U.S. debt with major Wall Street banks designated by the government as primary dealers. Those dealers then bid on their behalf at Treasury auctions.

China, which holds $1.17 trillion in U.S. Treasuries, still buys some Treasuries through primary dealers, but since June 2011, that route hasn't been necessary.

The documents viewed by Reuters show the U.S. Treasury Department has given the People's Bank of China a direct computer link to its auction system, which the Chinese first used to buy two-year notes in late June 2011.

China can now participate in auctions without placing bids through primary dealers. If it wants to sell, however, it still has to go through the market.
The change was not announced publicly or in any message to primary dealers.

"Direct bidding is open to a wide range of investors, but as a matter of general policy we do not comment on individual bidders," said Matt Anderson, a Treasury Department spokesman.

While there is been no prohibition on foreign government entities bidding directly, the Treasury's accommodation of China is unique.

The Treasury's sales of U.S. debt to China have become part of a politically charged public debate about China's role as the largest exporter to the United States and also the country's largest creditor.

The privilege may help China obtain U.S. debt for a better price by keeping Wall Street's knowledge of its orders to a minimum.


http://www.reuters.com/article/2012/05/21/us-usa-treasuries-china-idUSBRE84K11720120521


Cut out the middle man and go straight to the source.

Tetragrammaton
05-22-2012, 10:38 PM
They do a disservice to their fear mongering my mentioning that their debt ownership is only 1.17 trillion.

Dolphins9954
05-22-2012, 11:55 PM
They do a disservice to their fear mongering my mentioning that their debt ownership is only 1.17 trillion.

The Fed is our biggest pimp. But this move will only make it easier for China to close the gap.

LANGER72
05-23-2012, 08:17 AM
I really don't a see a problem with them dealing directly with the treasury under current circumstances. However, as soon as the next administration takes office, something must be done immediately about living within our means and paying back our debt.

Dolphins9954
05-23-2012, 08:26 AM
I really don't a see a problem with them dealing directly with the treasury under current circumstances. However, as soon as the next administration takes office, something must be done immediately about living within our means and paying back our debt.

http://www.finheaven.com/images/imported/2012/05/nnmdd0jpg-1.gif


Not with these 2 candidates.

Tetragrammaton
05-23-2012, 09:26 AM
Even if Romney did somehow manage to beat Obama, which he likely won't, the deficit would only continue to grow as retirees increase. What part of the Republican strategy of reducing taxes and increasing military spending is conducive to debt reduction?

Dolphins9954
05-23-2012, 10:23 AM
Even if Romney did somehow manage to beat Obama, which he likely won't, the deficit would only continue to grow as retirees increase. What part of the Republican strategy of reducing taxes and increasing military spending is conducive to debt reduction?


None. Obama doesn't even have the words "balance the budget" in his vocabulary while Romney backs Paul Ryan's plan that doesn't balance the budget for 3 more decades.

greenrules008
05-23-2012, 10:10 PM
can't wait until the chinese overlords take us, letting un shock troops follow all the while, with the thought police brigades. thanks a bunch! HA! HA! HA! HA!

Killerphins
05-24-2012, 12:16 AM
can't wait until the chinese overlords take us, letting un shock troops follow all the while, with the thought police brigades. thanks a bunch! HA! HA! HA! HA!

Makes no sense. Your meds are in the cabinet.

Valandui
05-24-2012, 01:48 AM
This is all a shell game anyway. The same people who own the Fed own China's central bank. They're just shifting their assets from one place to another. The whole "China owns our debt" thing is kind of a misnomer.

greenrules008
05-24-2012, 08:43 PM
yah, and the easter bunny just gave me two tickets to the new hotel at stonehenge. HA! HA! HA! HA! HA!