"... Should Americans be concerned that China has started dumping some of its Treasury holdings? After all, it raises serious questions about whether China will keep lending Washington money to help finance the federal deficit in the future.": From "China is dumping U.S. debt" by Matt Egan, CNN, 11 September 2015
Report on "China’s Holdings of U.S. Securities:
Implications for the U.S. Economy" by Wayne M. Morrison & Marc Labonte, Congressional Research Service, 19 August 2013
"...The Chinese buy U.S. T-securities by transferring U.S. dollars (not yuan) from their checking account at the Federal Reserve Bank to China’s T-security account, also at the Federal Reserve Bank. When[ever] the Chinese redeem those T-securities, the money is transferred back to China’s checking account at the Fed. During the entire purchase and redemption process, the dollars never leave the Fed." : From "What Policies for Global Prosperity?" by Warren Mosler, 23 September 2010
neweconomicperspectives.org
"...The US, as a sovereign currency issuer, faces no financial constraint. It cannot be forced into default. It controls its policy interest rate.
The rest of the world are users of the dollar; not issuers. They can never hold [the United States] hostage." : From "What If China Dumps US Treasury Bonds?" by L. Randall Wray, University of Missouri-Kansas City, 12 November 2013
"...What about indebtedness to foreigners?...To acquire [U.S. gov't bonds], China must export goods to us, not offset by equivalent imports. That is a cost to China. It’s a cost Beijing is prepared to pay, for its own reasons: export industries promote learning, technology transfer and product quality improvement, and they provide jobs to migrants from the countryside. But that’s China’s business. For China, the bonds themselves are a sterile hoard. There is almost nothing that Beijing can do with them;...its stock of T-bonds will just go on growing. And we will pay interest on it, not with real effort but by typing numbers into computers. There is no burden associated with this; not now and not later." From "In Defense of Deficits" by James K. Galbraith, The Nation, 4 March 2010
