As mentioned, Japan and China could rise so fast due in large part to their U.S. Treasury holdings in the first place.
From Zero Hedge:
The spread between Chinese and Japanese US Treasury holdings has declined to a tiny $33 billion, from $430 billion one short year ago (we know that China is now actively buying gold with its current account cash instead of US paper but that is irrelevant for the time being). What is more importantly is which of its top US Treasury holders (the Fed being naturally the largest) will the US end up disappointing: China or Japan, because as much as it wants, it won't be able to support both. What happens if and when the snubbed party decides to dispose of its $1.1 trillion in US securities?
http://www.zerohedge.com/news/china-japan-conflict-escalates-whom-will-us-support
Wednesday, September 19, 2012
As The China-Japan Conflict Escalates, Whom Will The US Support?
Topics:
China,
economic fundamentals,
geopolitics,
Japan,
policy,
The U.S.
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