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China sends Trump a little message by cutting US Debt Purchases

Tadhg Gaelach

Premium Account
Jan 14, 2016

Amid threats from Trump that he will target China with a trade war, the Chinese have quietly sent their own message of intent - but cutting down on the amount of US debt they are willing to buy. China is by far the largest foreign owner of US government and corporate debt. News of the cutback sent borrowing costs higher in the USA and sent a shudder through US stock markets, with the S&P500 and the NASDAQ suffering falls.

In short, the message from China is a simple but effective one - We control the interest rates not only in the USA but for the whole world economy.

Have a look though the article - one graphic shows that Ireland now holds more US bonds than Switzerland or the Cayman Islands - which shows what a money laundering center we have become.

China may be mulling Treasuries slowdown, but options limited