China Reduces Treasury Holdings For Third Straight Month
EmailABC News’ Matthew Jaffe reports:
Foreign holders of US government debt slightly increased their holdings in January, but China reduced its holdings for a third straight month, according to new data released today by the Treasury Department.
Chinese holdings fell by $5 billion to $889 billion in January, but China is still the largest foreign holder of Treasury securities. China briefly lost the top spot to Japan in December, but weeks later Treasury revised the data to show that the Chinese had regained the slot.
Today’s news comes a day after Chinese premier Wen Jiabao voiced concerns about the value of the dollar at a news conference in Beijing. If China and other nations offload their Treasury holdings due to the United States’ rising budget deficits, the US government could have to make higher interest payments.
Last week the government announced a record-high monthly budget deficit of $220.9 billion in February. The new red ink brought the total deficit for the first five months of the current fiscal year to $651 billion, far exceeding the $589 billion shortfall for the same timeframe in the last fiscal year. Last year ended with a record $1.4 trillion shortfall. The Obama administration has forecast a $1.56 trillion deficit for this year due to increased government spending and lower tax revenues during the country’s recession.
In January Japan kept their holdings steady at $765 billion, unchanged from the month before. Overall foreign owners of Treasuries increased their holdings by $19 billion during the month.
-Matthew Jaffe
Obama: 'Now Is the Time For Common Sense Action' 
Romney Takes Aim at Conservatives
Good. Maybe they won’t foreclose.
Posted by: Rick McDaniel | March 15, 2010, 10:33 am 10:33 am
Smart. China has its own credit rating entity. Why rely on Moody’s when it keeps failing investors.
Posted by: Bip | March 15, 2010, 10:54 am 10:54 am
When Obama’s trillion dollar HC bill passes we can kiss our AAA rating good-bye.
Posted by: millie | March 15, 2010, 11:23 am 11:23 am
Obama really made The PRC’s Premiere mad.. he(Wen J..) is smokin’ mad at the administration..
Posted by: DontGet818onMeNow | March 15, 2010, 2:51 pm 2:51 pm
Our government is already 12 trillion in debt. What difference would 3 trillion more make, if health care reform would cost that much?
Posted by: Russell Attoe | March 15, 2010, 3:06 pm 3:06 pm
The 3 trillion is only paper.. a barometer.. we have no idea how much money is being printed or how many bonds that the government purchases from itself..but I’ll bet the Chinese know.. and the EC knows.. it’s the taxpayer that’s in the dark..
Posted by: DontGet818onMeNow | March 15, 2010, 3:11 pm 3:11 pm
Republicans like illegals because they are cheap labor force. They also take “pressure” off poor, corrupt foreign countries to reform. They also, due to criminality and effect on legals’ employment, help keep the prison-industrialist complex going.
Farmers/Ranchers (even more so now that many agricultural operations are huge and/or corporate) like illegals because they are often MIGRATORY and CHEAP.
Democrats like illegals because they are people to “take care of” and therefore a “reason” for large social programs, big government, and civil right legislations. And FUTURE VOTERS when made legal, when their children are legal voters, or when they vote illegally.
Lawyers like illegals because they can SUE (aka: ABOGADO) and, because they often are a dangerous demographic (for any race) SINGLE, MALES in the 18-30 age range. Hence more business for ABOGADOs in lawsuits, criminal defense, etc.
Bankers like illegals because they lower salaries and destroy the upper-working and middle-classes. The illegals often come from corrupt countries so don’t vote or will vote for the “bosses”.
So the chance that the effected people (working-class and middle-class white and black Americans) have a chance to eliminate illegals or to stop anmesty is, almost, nil.
Posted by: Ed | March 15, 2010, 6:56 pm 6:56 pm
The USA should meddle in the internal affairs of China. The politicians seem to think that solves the problems of every other country on earth.
Posted by: ChinatownARCC | March 16, 2010, 12:54 am 12:54 am
Funny how the Chinese Commies are not feeling that Hope and Change! LOL! No time; too busy imprisoning, torturing, and executing Falun Gong members and Tibetan Buddhist monks, I suppose.
Posted by: Most Fiscally Responsible Government EVER! | March 16, 2010, 1:27 pm 1:27 pm
Paul Krugman has an interesting point about in relation to a misstatement in an article about China:
“The US private sector has gone from being a huge net borrower to being a net lender; meanwhile, government borrowing has surged, but not enough to offset the private plunge. As a nation, our dependence on foreign loans is way down; the surging deficit is, in effect, being domestically financed.
The bottom line in all this is that we don’t need the Chinese to keep interest rates down. If they decide to pull back, what they’re basically doing is selling dollars and buying other currencies — and that’s actually an expansionary policy for the United States, just as selling shekels and buying other currencies was an expansionary policy for Israel (it doesn’t matter who does it!).
As Dean nicely puts it, “China has an unloaded water pistol pointed at our heads.” Actually, it’s even better: China can, if it chooses, throw some cold water on us — but it’s a hot day, and we would actually enjoy it.” (NYT; See also his article on China, Israel, America.)
Posted by: progressive mama | March 16, 2010, 1:44 pm 1:44 pm
Again HCR bill related….When Obama’s trillion dollar HC bill passes we can kiss our AAA rating good-bye.
Posted by: Ilan Ben Menachem | March 18, 2010, 5:13 am 5:13 am