Under What Conditions Would China Dump US Treasuries or Dollar Holdings?

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by Mish Shedlock, Mish Talk:

Numerous articles and Tweets have surfaced about China dumping Treasuries. First let’s investigate the rumors. Then let’s look at conditions in which China might dump dollar assets.

Not China Dumping

Until the past week there was a relentless selloff in US treasuries that sent bond yields soaring.

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Rumors and articles surfaced that China dumping Treasuries was the reason.

I discussed the situation on October 4 in Bond Bulls are Getting Crushed in a Relentless Selloff, It’s Not China

Has China sold any US treasuries? Likely not. Much of what China holds is hidden in State Owned Enterprises and custodied Treasuries.

No Net Sales

As I read the chart, there is no net sales since mid-2020 and only small, brief sales all the way back to 2018 with net accumulation since then.

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