China's US govt debt holdings hit 2010 high: Treasury

Source: Economic Times of India

15 Jun 2010, 2006 hrs IST,AGENCIES

WASHINGTON: China has raised its US government debt holdings to the highest level this year, according to US Treasury data published on Tuesday.

The Chinese government raised its US Treasury bond holdings to 900.2 billion dollars in April, its highest level since November 2009, the Treasury Department said in a monthly report on international capital flows.

China remained far ahead as the top foreign debt holder, followed by Japan, which held 795.5 billion dollars in April, and third-placed Britain at 239.3 billion dollars, according to the figures.

There has been an influx of investments into US Treasury bonds -- a channel used by the government to borrow from the public to finance its burgeoning deficit -- amid the mounting European debt crisis.

The latest Treasury data also showed that net foreign purchases of US securities rose in April but at a slower pace than the record set in March.

Net long-term foreign purchases fell to 83 billion dollars from a record 140.5 billion dollars in March.

Read more: http://economictimes.indiatimes.com/news/international-business/Chinas-US-govt-debt-holdings-hit-2010-high-Treasury/articleshow/6051362.cms

...and charge me a three-month interest penalty, IIRC. :)

they wouldn't like the results of a trillion dollars in liquid cash hitting the FX markets overnight.

China is in a bind, they need to keep buying our bonds to preserve the value of their existing hoard - if they don't, interest rates will rise and therefore the price of the bonds they now hold will fall - but of course every new bond they buy puts them deeper into that bind.

They hold U.S. Treasury bonds, which are for a fixed time period. They could sell the bonds to someone else and cause all kinds of trouble by competing with our additional bond sales, but it is not like a loan from a loan shark.

This was supposed to be a reply to the first poster...oops. ;)

The highest ever too, as noted.

Is less than 1/14th of our total debt.

Remember that next time you hear the "China owns our ass" and "we borrow all our money from China" BS truisms.