News Story of the Day: China is dumping a lot of its United States Treasury holdings, which causing many to be worried about the potential threats to the national debt. The Chinese government is doing this in an effort to raise cash to help support its fledgling markets. Now there are some concerned about China’s ability to finance the U.S.
China dumped a record $94 billion, or 2.6 percent, of its Treasury holdings.
With China holding $1.3 trillion of U.S. bonds, if the economic powerhouse ceases propping up the U.S. debt then Treasury rates and the cost of everything that relies on Treasury rates, like mortgage and credit card interest rates, could substantially increase. This could prompt the Federal Reserve to delay raising interest rates next week.
“Capital outflows have skyrocketed in China and the yuan is under intense selling pressure. The only thing they could do is sell Treasurys to buy their own currency,” Walter Zimmerman, chief technical analyst at United-ICAP, told CNN.
The yield on the 10-year Treasury currently stands at 2.2 percent.
Chart of the Day: Just who holds exactly the near $60 trillion in global debt? This chart, designed by Visual Capitalist, finds that the biggest holders of the world’s debt are the United States (29 percent) and Japan (20 percent). So much for getting the nation’s finances under control…
Illustration of the Day: Frustrated by the establishment Democrats and Republicans? Considering how much they all detest Donald Trump then perhaps you should cast a vote for the billionaire just to tick off MSNBC, Washington and Bernie Sanders. (Cartoon by: Larry Wright of CagleCartoons.com.)
Quote of the Day: With election season in full swing, it’s time hear politicians trying to apply their solutions to some of the non-problems. Instead of talking about sound money, a non-interventionist foreign policy and ending the Federal Reserve, candidates on both sides of the aisle are in support of the status quo, or ramping up the size of government a la Bernie Sanders. Let’s take a gander at a terrific Groucho Marx quote:
“Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies.”
Videos of the Day: Today is the anniversary of the September 11th, 2001 terrorist attacks. It was a terrible day that transpired because of the foreign policy directives of the U.S. for so many years. Bombing Muslim nations, building U.S. embassies on holy land and overthrowing elected leaders led to the deaths of thousands of Americans on that horrific day. With that being said, here are two terrific videos; one of Ron Paul and one of Rudy Giuliani.
China is not selling its U.S. debt to raise money,or because it doesn’t trust us to make good on it. Nor for any other economic reason. China is divesting itself of U.S. debt because it is preparing for war with the U.S.