China Reduced Treasury Holdings for Second Straight Month as Yields Fell

China Reduced Treasury Holdings for Second Straight Month as Yields Fell

* China Reduced Treasury Holdings for Second Straight Month as Yields Fell -Jan 18, 2012 3:49 PM ET
bloomberg.com

" China, the largest foreign lender to the U.S., reduced its holdings of Treasuries in November for a second month as yields on the debt approached lows of the year and total foreign demand accelerated. China’s U.S. government securities ownership shrank by 0.1 percent, or $1.5 billion, in November to $1.13 trillion, according to Treasury data released yesterday. The Communist nation’s bill holdings fell 12 percent to $2.3 billion. "

" Foreign Ownership Rises

Total foreign holdings rose 1.7 percent in November to $4.75 trillion, U.S. government data show. Foreigners held 48 percent of the $9.88 trillion of outstanding public Treasury debt, up from 47.8 percent the month before. Foreign holdings of U.S. Treasuries have risen 7.1 percent this year through November, the smallest increase since 2006. International ownership of U.S. government debt rose 20 percent annually in the prior two years, and at a compound rate of 17 percent since 2001, or as far back as the data are available. Treasuries returned 0.73 percent in November after losing 0.76 percent in October, according to the Bank of America Merrill Lynch Treasury Master Index. Yields on benchmark 10- year notes were 1.9 percent, down from 2.07 percent on Nov. 30. "

" Holdings Revisions

China’s holdings of U.S. debt have fallen 2.4 percent this year through November to $1.13 trillion, the least since July 2010, when they totaled $1.12 trillion, from $1.16 trillion at the end of 2010, Treasury data show.The data are expected to be revised in 2012. On Feb. 28, 2011, the U.S. updated earlier estimates, showing China’s Treasury investments in October 2010 were a record $1.18 trillion, 30 percent more than the initial estimate of $906.8 billion. "

This whole article is very interesting. In my opinion, This article shows money is going to continue flowing back to the U.S.A as people realize there's no where else to put their money since other favored countries are starting to fail. Not only that but this data in this article clearly show China is trying to raise money because it's about to be announced that China is going to have a debt issue just like the U.S and Europe and now China. China already knows this themselves and ,In my opinion are trying to act on it before people liquidate there China assets and cause China to devalue, So by the time people do, China can manage this devalue in a more efficient way, Because either way, It's going to happen and China knows this. U.S assets and the dollar will continue to increase in value from this occurrence