about US bonds and "lending the US economy"

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about US bonds and "lending the US economy"

Сообщение HainanWel.com(e)! » 18 мар 2016, 19:54

I (naive) hoped that the social network and the "patriotic public" (tm) has played enough in pugalka about "aah! Criminal Putin regime and criminal Medvedev's government is putting money into the US economy! Buy US bonds while the Americans keep us place our Eurobonds! This masochism and betrayal !! We give Americans money at zero percent, and themselves occupy expensive! This is sabotage! "
In vain I hoped. Not played enough. From belts and columnists columnists, however, to / Nalini all shaking with righteous anger.

By popular demand, a short explanation is still one last time. Without the comments, because the next debate no time or desire.

I always try to appeal to the common sense of readers. I'll try this time. Let's take a look around: Is there another country in the world, which on one hand keep the part of foreign exchange reserves in US bonds and are themselves coming to the market with a view to borrow?
The most glaring example - China. He holds US bonds at 1.23 trillion dollars, while the external currency debt amounts to almost 0.85 trillion. Most of this debt is on the state-owned banks, the Chinese Central Bank and the Chinese government. http://www.barrons.com/articles/does-ch ... 1444726980
It would seem, why the Central Bank of China did not sell US bonds, and not to satisfy the need of the state of the banking sector and the Government of China in the foreign exchange financing?
The second question is why the Chinese do hold currency in US bonds, because it is possible to invest in the Chinese economy?
I hope that even the most emotional thoughtful patriot. If China has not shot anyone for this scheme, can it make sense? Or there is also always a "collective Ulyukayev," which is engaged in sabotage under the guise of the Chinese Communist Party?

The second striking example - Venezuela. Despite the fact that the country - the horror and almost economic collapse, the currency depreciates, and all terribly, still belong to Venezuela, US bonds for $ 278 million (as of January 1, 2016) - http://ticdata.treasury.gov/Publish/ slt3d.txt
Once again, I appeal to common sense: Chavez, Maduro and his team - idiots and pests? Or again, in this scheme, there is a sense?
By the way, Venezuela is still an active borrower in the bond market, with a terribly high rate of interest.

So everywhere in the world (I took only two extreme examples of countries favorite patriotic public, but dozens of them) there is a situation where on the one hand the state has reserves that can be stored, including in the US currency in the form of short-term bonds, and at the same time, there are currency loans that the state take on the international market.
Now, the logic leaves only two options:
The first option - "patriotic public" on behalf of bloggers, columnists and joined social networks users, has unveiled a worldwide conspiracy of traitors and compradors who seized all the countries, governments and central banks from China to Japan, and from Venezuela to Mongolia. If this option is close to you, I can only sympathize, but I can not help anything.
The second option - despite the fact that the situation is "at odds" with the narrow-minded logic, it still makes sense.

Now, about the meaning. Usually, the holder of US bonds is the central bank of a country. That is the very structure that is engaged in the stabilization of the national currency. Foreign exchange reserves it needs in the case of the country massively flee the capital or the state, is about right, now we need a lot of currency. This buffer, Potbelly and tether. If not, then the only one who will decide tomorrow how many rubles a dollar - it will be private speculators.
There are idiots who believe that with a positive trade balance of foreign exchange reserves are not needed. This nonsense about the same series as the idea that "there are times salary, then why do we need saving?". Savings, as well as foreign exchange reserves, needed in case your "salary" suddenly ends. For example, if China did not have large reserves, it could not in the past year, the outflow of capital to survive on $ 1 trillion out of the country. And so - and survived quite actively resisting assaults Mr. Soros and his friends.

I emphasize again: central banks, though Russia, at least in China, although the Venezuelan currency reserve should be stored in something that:
a) at any time to turn in the currency "cash"
b) it is unlikely to lose
Offer "just to keep money in the bank" can be considered until such time until there are two questions: what will happen if a particular bank will sink? is not it better for these reserves get at least some interest and have a warranty return?
Here come all the world's Central Bank to the same conclusion: the best way to store - the short-term US bonds.

Often the question arises: what will happen if the Americans to impose sanctions and confiscate our dollar-denominated bonds? The answer is: unfortunately, the Americans will not do us such a gift. Confiscation or freezing of bonds outside the UN sanctions will lead to the collapse of the US bond market, as all the countries that have a potential conflict with the United States (such as China) will come to the conclusion that Americans are mad, do not respect the rules of the game and their papers should immediately get rid of . It would be a deadly blow to the entire dollar system.

Ministry of Finance, which entered the market with their bonds and are looking for buyers, they need money to invest (or for eating away :)), and they are necessary for the long term to invest in projects that do not involve the possibility at any time to take and "tear" of them money because the state needed urgent currency, or because it is necessary to keep the exchange rate of the national currency. It is in this, with a few exceptions, most countries of the bonds are not suitable to hold in their reserves as they are simply not possible in case of need quickly and without losses to sell for cash. Moreover, even the country in which the very "deep" markets its bonds (Germany, France, Japan) still keep part of the reserves in the "foreign" bonds.
By the way, in order to make liquid bond market of the Russian Ministry of Finance, they should be released in greater amounts (China is actively moving in this direction).

Last thing. There is a logical question: when it stops? When the global system will no longer be tied to the dollar?
Desire poherit system - a logical and correct, but to act rashly, and alone - no fools, because the consequences for the economy of certain renegade countries (if there will be enough) will be heavy. Dismantling of the dollar system runs from the cotton material care and the Chinese just as hard (nothing can be done, because it is in China is the locomotive force of the size of the process to run ahead of the engine -. Useless). "The pool of currencies of the BRICS" - is the future "collective gold and currency reserves of a new type, in which the dollar will not need a New Development Bank -. Will to some extent replace the international bond market, which still prefer to lend in dollars Record your gold shop in Russian and Chinese. reserves - this is also the direction of the dismantling of the dollar system (or "insurance" for this process) at the time of launch almost inevitable uS hyperinflation everything should be ready, and everything seems to be in time to catch the chances, we and our allies are..
This does not mean that everything is fine in the sphere of economics and finance. We have a lot of serious problems, but you need to solve real problems, instead of combing paranoid style "neighbors KGB emitters are in the toilet," as do the "opinion leaders" in the media and social networks.

All we can do it. And if we can do so in less infpole hysteria and thought more, it will be very cool.

PS: I also sometimes wildly envious leaders of the USSR. Here in 1925 it was not necessary to explain why the USSR in social networks takes the currency loan from Deutsche Bank on the development of the national economy.
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