Prague Twin

Tuesday, April 04, 2006

Traders Hear it First

On the currency trading wire, I found this quote this morning which, if true, should have Americans worried.

"There was talk in the Asian market that China may stop buying US demoniated bonds and gradually reduce holdings. This talk was reportedly being linked to remarks made by the vice parliament cheif. The PBOC were keen to play down the remarks saying that this was only a personal view and not official policy."

The markets tend to take these things in stride and make moves to protect themselves from any moves that may occurs as a result of such a perception.

However, if true, this could be the shift in policy that the we have all been worried about. With the kind of public debt the US is running, it can little afford to loose China as a major buyer of bonds.


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