Buyers' remorse? China, Japan and Russia losing their taste for U.S. debt.....

[marmar]

International Demand for U.S. Assets Slowed in April (Update3)
By Vincent Del Giudice


June 15 (Bloomberg) -- International purchases of American financial assets grew more slowly in April as China, Japan and Russia pared demand for Treasuries, underscoring the danger of U.S. reliance on foreigners to finance its fiscal deficit.

Total net purchases of long-term equities, notes and bonds rose a net $11.2 billion, compared with buying of $55.4 billion in March, the Treasury said today in Washington. International holdings of Treasuries increased a net $41.9 billion, compared with the $55.3 billion gain in March. Including bills, the holdings fell a net $2.6 billion.

Benchmark 10-year Treasuries, which rose after Russian Finance Minister Alexei Kudrin said it’s “too early to speak of an alternative” to the dollar, remained higher after today’s report. That indicates investors have yet to see evidence that international money managers are losing confidence in the currency that has proved a haven during the credit crisis.

“Talk that foreign central banks will diversify out of their dollar and Treasury holdings is so far just talk,” said Chris Rupkey, chief financial economist at Bank of Tokyo- Mitsubishi UFJ Ltd. in New York. “The worst financial crisis since the Great Depression is still ongoing and foreign investors and central banks still have a safe haven demand for U.S. Treasuries.”

Including short-term securities such as stock swaps, foreigners sold a net $53.2 billion of U.S. financial assets, compared with net buying of $25 billion the previous month. ........(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=aXBARzduh3uY

[Dyedinthewoolliberal]

1. Those creaks and groans

we hear are the sound of the system stressing under the weight of our financial burdens.
It now becomes more apparent how really damamging the Iraq thing is to the Nation. For the last 8 years you know who was wreaking havoc with our ability to play nice and make friends.
If these other countries could have ganged up on us economically a long time ago they would have. But we were thought of different then and hadn't pushed (in such an obvious manner) others around in our (read Bush)desire to prove we were the Big Player on the planet.
Now, with the bank/real estate debacle, GM/Chrysler, all the jobs already leaving for other countries, we are up shit creek.
All the other nations have to do is stop operating on the idea the dollar is the currency of the world.
Who will be blamed for this? Unions? Working mothers? Gay people who marry? A President with about 120 days in office?
Sure hope someone in DC knows how to paddle.............

[Old and In the Way]

3. China/Japan/Russia are going to have to finesse their monetary policies

with regards to their debt holdings and the dollar. Anything drastic would make their current USD investments worth less. How much less depends on how they react to the situation. I suspect that they will continue to ease out of the Treasury debt buys and try to slowly liquidate their positions (except who's buying?)...but come back in if the dollar starts to erode.

OTOH, if the USD turns into monopoly money, it may force us to reinvest in our own economy and start, you know, manufacturing things again.

I know one thing, this mess is squarely on the Republican ledger. 30+ plus years of deregulation/taxcuts/shorting US manufacturing is the essence of their fiscal policy.

[ljm2002]

2. Surprise, surprise!

We passed bad paper all around the globe, and now they don't trust us.

Imagine that.

[malaise]

4. Ding ding

but M$Greedia isn't telling that truth to the public.

I have a bet with hubby that the US has no intention of ever paying that Chinese debt.

[ljm2002]

5. It amazes me...

...that people in general can't seem to put two and two together and come up with four anymore.

U.S. citizens don't want to see it and our corporate masters and their media minions are actively hiding it. So here we sit in our own little bubble, La La La I Can't Hear You, and the rest of the world watches while we pretend that the outright fraud that our bright-boy financial geniuses perpetrated has nothing, nothing at all to do with the collapse of the markets and the erosion of the dollar as the world's preferred currency.

Oh well, it had to happen sometime. Here's hoping that we give up our empire somewhat gracefully and that we come back to our own land and do better by our own people, and less harm to others.

Well a gal can dream, can't she?