Comments on: Will China Buy our Treasuries?

By: Kiko

Kiko — Sat, 08 Sep 2012 05:51:42 +0000

It’s hard to understand how an otieswhre intelligent young man like Ben Katcher is so mystified by what promoters of sanctions seek to achieve. Isn’t it perfectly obvious?Diplomats in the Obama Administration and the editorial writers at the New York Times aren’t stupid; they fully understand that any sanctions regime that is imposed is unlikely to deter Iran from obtaining nuclear weapons if it is chooses to develop them.Imposing sanctions kicks the ball down the field and buys the Administration time. Sanctions placate the Europeans who are bigger Iran hawks than Obama is. Sanctions are a necessary prerequisite to an American military strike against Iran (or American support for an Israeli strike) if that’s the direction the Administration decides to take. In the event that Iran does acquire nuclear weapons (leaving deterrence as the only option for containing Iran) sanctions provide the Administration with an excuse; at least the Administration will be able to say, we tried something; unfortunately it didn’t work. As for the approach the Leveretts and Katcher recommend; forging a grand bargain; it’s increasingly clear that the overwhelming consensus of foreign policy professionals on the right, on the left and in between is that this approach is a fool’s errand. Grand bargain advocates are increasingly viewed as a fringe element now being relegated to the sidelines where they can commune with others of their kind like the 9/11 conspiracy theorists, those who think the Americans (or Israelis) used a death ray to cause the Haiti earthquake and those who think Christopher Marlowe actually authored the plays attributed to Shakespeare.It’s fine if Katcher wants to align himself with this fringe point of view; who knows, maybe it’s even a good career move. But do we really need Katcher to feign ignorance about what sanction supporters are trying to accomplish?He knows perfectly well what they are trying to accomplish.As for the Leveretts, I wonder if they entertain the fantasy that they will ever be able to work as diplomats again. It’s one thing to disagree with the policies of George W. Bush or Barack Obama; it’s another thing to actively root for those policies to fail. The tenor of the posts on this blog makes clear that they’re not just expecting China to thwart American policy on Iran; they’re rooting for China to thwart American policy. In this, they are alot like Chas Freeman whose only regret was that the Chinese were not more brutal in Tiananmen Square than they were.A near universal consensus has developed that sanctions against Iran are the way to go; realists may disagree, but the whole realist school of foreign policy is increasingly anachronistic and now almost completely marginalized. Rooting for the failure of American policy is fine for bloggers, it hardly seems like a recipe for future success in the foreign policy establishment.I hope the Leveretts plan to maintain the Race for Iran far into the future. It’s about the only place that their ideas are likely to be taken seriously..

By: Blogging through the Financial Crisis | Economic Policy | Bob McTeer | NCPA

Thu, 14 May 2009 15:31:22 +0000

[...] 4-12 Will China Buy our Treasuries [...]

By: Karen

Karen — Mon, 13 Apr 2009 21:03:50 +0000

Couldn’t China buy other American assets such as corporate bonds, stocks, entire companies, or real estate (instead of Treasuries)?

Couldn’t they trade their Treasuries for other countries’ debt instruments (realizing they’d probably have to bid up the prices a bit because they operate on a large scale)?

Just wondering. I’m no economist, just someone trying to make sense of the risks to our nation’s future.

By: hoho

hoho — Mon, 13 Apr 2009 19:03:26 +0000

i don’t know whether China will keep buying more.

but there are possibilities, if , and only if China is a savvy investor, well, like me.

i would like to share such a nightmare with Americans.

first, i would tolerate the ups and downs of treasuries so long as Fed doesn’t print money like crazy. oops… now that Americans are debasing the true national treasure of U.S.A., that is, the greenback as the world currency, all i have to do is go to Vanguard and buy the heck pile of index funds on a continuous basis.

not because that i admire Mr. Bogle so much,(as a matter of fact i do), but because there is not too much left yet logically sound.

let’s see what we’ll get?
the capital doesn’t flow back to China. the excuses to trade China’s currency up does not exist.
even though Fed doesn’t want the rates to rise, as long as China dumps the treasuries ,say 10% of its holding at one time, the man-made treasuries bubble is all gone. rates, from treasuries yield to 30-yr mortgage fixed, will pop like a Christmas tree.

Fed prints more money, i dump more treasuries, and buy more Vanguard index funds.i don’t need to go to Harvard to figure out how to fight the ultra inflation in the foreseeable future.

guess what? Communist China could own America, lock , stock and barrel. how about Americans’ 401(k)s all denominated in RMB yuan some day?

By: K T Cat

K T Cat — Mon, 13 Apr 2009 15:19:03 +0000

They can want to buy our Treasuries all day long. The simple math of the situation shows that they can't buy enough of them to keep their existing investments from eroding. I suspect they've already done this math.

By: John Booke

John Booke — Mon, 13 Apr 2009 00:21:11 +0000

China must keep its currency, the yuan, low compared to our dollar if they want to sell their products in the US. If they do not then Americans will buy goods from China’s competitors and less goods from China. Now more than in long time Americans are very very price conscience. American shoppers are the rare life blood of world trade. There are no replacements. China has to buy US treasuries or the heart of its economy will stop beating.