George Soros: holdings of us debt to buy u.s. stocks have fallen into the "dollar trap"

Although it has been the Chinese Government as a heart big, but China's holdings of bonds for the United States still silently in all channels.

United States Treasury Department 17, international capital flows (TIC) shows that as of the end of China's total holdings of 9 7989 billion United States national debt, and the month of August, 18 billion, compared to increase relative to the United States Government bonds of the second and third largest foreign holder of Japan and the United Kingdom respectively up to 203 million and 224 million holdings, it is not surprising, but China still a United States national debt the largest foreign holder.

Report, there are two noteworthy data: one that States have dished out long debt duanzhai, second is China since November 2007, the investment since start United States stock. This may prove that the United States economy begins with confidence.

The total amount is still ranked first in the world

Small holdings in China September 18 billion United States debt remains the head of the States

United States Treasury Department report showed that the United States Government bonds of the second and third largest foreign holder of Japan and the United Kingdom in September are larger holdings, 203 billion respectively in the holdings and holdings of 224 billion, respectively 7515 billion and 2493 billion.

Compared with the month of August, my September a total of 18 million in the United States national debt holdings, and to hold a total of 9 month of our United States national debt, 7989 billion total is still ranked first in the world.

The report also shows that the United States September buy long-term Treasury bonds of foreign capital inflow of 557 million, of which private investors net purchase 448 billion u.s. dollars, the official agency purchases to 109 billion. At the same time, the United States residents buy foreign long-term bonds for $ 15 billion.

The Chinese Government on this quite a headache: as early as March Wen Jiabao is warned United States Government measure its fiscal and financial policy, expressed his concern about China holds huge dollar assets. But before this in Obama's visit to China, Wen Jiabao has reiterated this worry.

Data show that China's foreign exchange reserves in the third quarter of this year reached a historical high of 2.27 trillion, equivalent to gross domestic product (G D P) by 50%. Analysts estimate that this will probably have more than 2/3 ratio is US dollar assets, for how to reduce the dollar assets, China's Central Bank has no more.

September, China's holdings of United States bonds 18 billion data show that China's holdings of speed has been slowed down?

Number is still growing

Standard Chartered Bank economist Yan Jin-an interview with this newspaper yesterday said that the United States Treasury Department September China United States national debt holdings is still a total data. From the data view, the September holdings and August than change is not very big, but we each month visit from details like long-term Treasury bonds and short-term bond data. This part of the data display, September, China still bought 107 billion long-term United States national debt, selling 90 million short-term debt. Yan Jin's view, this part of the data is compared with the earlier and there is no significant change: China for long-term debt still on the increase. This is because along with the United States economic recovery, and long-term Treasury bonds than short-term bonds more secure.

Based on this, Yan Jin yesterday reaffirmed: the Ministry of finance from the United States, China, the data may be part of the United States national debt data in London to buy, and to learn more detailed information, you still need to visit United Kingdom data. While the United States next year will be given a more detailed data--United States Treasury Department's annual report-adjusts full year data holdings and adhere to the national debt, and this data will be in February or April.

Now that the data does not demonstrate China's new strategy to sell bonds in the United States. Despite the slowdown in China may be purchased, but also in purchase---whether it be buying long-term bonds in the United States, or from another financial center to purchase.

While the United States has published data include private purchase and official purchase total of data from the data view, purchases may still increase.

Nevertheless, this data is not completely without highlights.

China has purchased in September 13 billion United States stock. Although this number with the United States national debt ratio but small, since November 2007, China is not in the United States stock on the new investment. This is the month of data in a particular point. Yan Jin's view, this could prove that start from September, China on the United States have greater confidence in the stock market. But this only occupies China United States assets held by a total of 7%, is not a great share ratio.

It is difficult to hit $ waichu

In fact, the United States economist George Soros last month in Hungary Budapest is located in the Central European University, a series of lectures that will the dollar as the major international currency has resulted in a dangerous imbalance. The dollar has lost its had the trust and confidence, but no other currencies may be replaced. Now the general trend is various currencies are the gold and other commodities and transfer of tangible assets. This is harmful because it will be these assets locked and cannot be put into effective use, and fanned fears of inflation.

In the United States George Soros opinion, should not be exclusive to the wider use of special drawing rights (SD R). This allows the international community to urge China to abandon its currency pegged, but also reduce international imbalances in the best way. In the light of the special drawing right is composed of several national currency decision, no monetary enjoy unfair preference privileges. Special drawing rights are included in the scope of the currency must be expanded, some of the new currency (including RMB), may not be fully convertible. Thus, the dollar may still be set up again for more desirable reserve currency, whose premise is that the dollar is carefully regulated.

Special drawing rights as one of the great advantages, is that it allows the creation of an international currency. Special like this moment this is particularly useful in that currency will be directed to where they are most needed. For now this will be a great improvement. This mechanism has agreed to

Huh doesn't need additional reserve of rich countries, the share of their existing be transferred to countries that need to be reserved, in a small area has begun.

As George Soros said, China has been trapped in a dollar trap, if you continue to buy United States national debt, dollar and inflation risks are great, there is risk of loss of assets is very high; if you do not buy a United States national debt, United States Department of Treasury bonds supply resulted in excessive amounts of national debt prices, the same will let China stock of United States bonds held by the compromise.

In fact the Chinese officials and BJ's recent Western State officials indicated that there is no other choice but to continue its growing foreign exchange reserves of the majority of investment in the United States national debt. This remains the size and liquidity to support its large purchase behavior unique market.

Because of its huge size of foreign exchange reserves, if a massive transfer of China foreign exchange investment direction, may immediately deactivate any other target market chaos; if the institution sold too many dollars, would also give the sharp depreciation of the existing reserves. A bit reluctant to disclose names of Western officials told the financial times said.

A State-owned bank analysts then pointed out that China's huge size, regardless of the purchase waichu euros or yen are faced to the euro and the Yen's appreciation, this will result in occupies waichu scale in China for more than two-thirds of the risk of devaluation of the dollar assets.

Despite this, the Chinese Government is likely to be in talks with Obama once again raised the dollar assets security considerations, but so far, the United States national debt is relatively important part, but a short time, we also difficult foreign exchange assets investment diversification, China, US dollar or very important. Yan Jin said yesterday.