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Tit for tat: China hosts the largest sale of US debt – Russia news today

Tit for tat: China hosts the largest sale of US debt

© REUTERS / Damir SagoljВизит the Donald trump of China. 09.11.2017Tit for tat: China hosts the largest sale of US debt© REUTERS / Damir Sagolj

China, already reduced investments in US debt to six-month lows, ready to go to the next step. According to The Wall Street Journal, in October, Beijing is planning to dump us bonds for three billion dollars — this is one of the largest sales since 2004. The reason for the worsening of relations with Washington because of the trade war. What happens if the Chinese use «the debt weapon» to full power — in the material RIA Novosti.

You have been warned

China — largest foreign creditor of the us economy. On the balance sheet of the Chinese Central Bank is now listed on the U.S. Treasury more than a trillion dollars — almost 20 percent of the total debt of Washington owned by foreign holders.

At the end of 2016 — early 2017, the Chinese have reduced investments in these securities to compensate for the strengthening of the yuan, but since then have restored your bond portfolio.

The Chinese economy is suffering because of the actions of the United States: the damage from unleashed by Washington’s trade war is already estimated in billions of dollars. C beginning of the year the stock market index of China Shanghai Composite has fallen 15%.

China and Japan are not the only sellers of US debt. Of the thirty largest holders of treasuries have already left Russia and Turkey affected by economic pressure from Washington.

Moscow, in particular, got rid of most of the entire portfolio: in April-may, the Central Bank reduced its investments in us debt securities to a paltry 15 billion dollars (at the beginning of the year, the amount exceeded one hundred billion).

From US government bonds and get rid of the smaller holders — Mexico, India, Taiwan. © REUTERS / Eduardo MunozПремьер Prime Minister of Japan Shinzo Abe at the 73rd session of the General Assembly of the United Nations in the headquarters of UN in new York. 25 Sep 2018 Tit for tat: China hosts the largest sale of US debt© REUTERS / Eduardo MunozПремьер Prime Minister of Japan Shinzo Abe at the 73rd session of the General Assembly of the United Nations in the headquarters of UN in new York. 25 Sep 2018

«Foreign creditors is very important for the American economy. We can not exist under such economic growth and disappointing forecasts for the budget deficit without foreign capital,» — noted American portfolio managers Loomis, Sayles & Co.

Meanwhile, the General trend in the dumping of treasuries has increased. According to estimates of Reuters, now the international investors from U.S. Treasury bonds at the fastest pace since October of 2016.

The reasons are obvious: the aggressive policy of Washington reduces the number of people willing to lend us economy, and at the same time leads to the fact that more and more countries seek to exclude the dollar from the calculations.© 2018 AFP / Jewel SamadСувенирная the American dollar bill with a portrait of Donald trumpTit for tat: China hosts the largest sale of US debt© AFP 2018 / Jewel SamadСувенирная the American dollar bill with a portrait of Donald trump

The «tyranny» of the dollar

That dominant role of the dollar will soon come to an end, says the American financial Agency Bloomberg. The current status of United States currency Bloomberg experts define as «tyranny,» pointing out that «it’s time for regime change.»

The publication notes that now in the global financial system is a paradoxical situation. On the one hand, the dollar — world currency, which accounts for more than half of all calculations, and with another — the US President says about the exclusivity of their country. Why in the world are quickly revising the attitude towards the American currency.

Russia, in particular, reducing dollar-denominated assets because of the growing risks in international operations, and China is challenging the dollar in the global energy markets, concluding contracts in yuan.

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