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Explanation is needed



July 06, 2009 – Comments (1)

I can't remember the number of times I heard this esoteric argument that China and others should purchase more treasuries to "protect" their dollar holdings. Does anybody have a clear explanation of how one is supposed to pull his chestnuts out of the fire by throwing more chestnuts into the fire? I admit I was never good at Hegelian dialectics :) 

1 Comments – Post Your Own

#1) On July 06, 2009 at 11:21 PM, russiangambit (28.83) wrote:

I don't think Chinese themselves agree that they should be buying more treasuries. It seems they have been trying to put their USDs into commodities and assets lately.

I read somewhere that Japanese are buying treasuries lately because with their deflation, the US rates are not that bad.

Actually, have you ever seen at a bazaar a trick where a vendor hires somebody to pretend to be a shopper . When people see the "shopper" buying they are more confident buying from the same vendor. That reminds me the situation with treasuries and FED and FED is the shopper.

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