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> But that's all it is. It's not an investment. Ridiculous, simply untrue. Currency manipulation explains the conversion from yuan to dollars, but not from do
by grimtrigger 13y ago
> But that's all it is. It's not an investment.
Ridiculous, simply untrue.
Currency manipulation explains the conversion from yuan to dollars, but not from dollars to t-bills.
Why would China convert dollars to t-bills if they didn't see t-bills as a better investment than dollars?
- scott_s 13y agoI mostly agree, but they don't really have much of a choice. They have to put the dollars somewhere, and when you're dealing with that many, Treasury bills are really the only game in town.
- grimtrigger 13y agoWhy not a commercial bank or an investment fund?
- scott_s 13y agoChina has about $1.2 trillion (with a 't') in Treasury bills. US GDP last year was about $15.7 trillion. Bank of America has about $2 trillion in assets. If the amount of money you give to a bank is more than half its current assets, then your relationship to the bank is fundamentally different than anyone else. You're not a customer. You're an owner. That's the scale of money that we're talking here. Once you have this much money to store, it becomes clear that there's no such thing as a completely safe place. But, out of all of the unsafe places, US Treasury bills are less unsafe than everything else.
- k2enemy 13y agoIt is explained in the article. But the Chinese government for various reasons wants to subsidize Chinese manufacturing. So they want to send those dollars they accumulate back to the United States. China wants to send the dollars back to the US so that we can repeat the cycle. They could do it by buying US goods or stocks and the author explains why they don't. So the alternative is to buy treasuries.
- yxhuvud 13y agoBecause they see it as an investment in their own industry.