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1 Comment
  1. DavidLazarusUK says

    I doubt that China will be able to raise its consumption rapidly without creating a state pension system, and a unemployment system. This is one of the prime reasons for Chinas incredible savings rate, that and the need to get on the housing ladder. China needs to clamp down on its property bubble because it encourages still more savings as property rises ever higher.

    If the Chinese did stop buying Treasuries the rates might not go up as much as expected as there will still be a safe haven reason as a result of revolutions in many countries. Also higher rates will boost the value of the dollar and increase the value of the interest payments to China, so less need to sell.

    As for a boost in US housing that is exceptionally unlikely as US consumers are already loaded with debt, and is in all reality now entering a twenty year deleveraging cycle Japanese style. The rounds of QE might hold values up temporarily but until real fiscal measures get through to Main Street expect the US economy to level out in an L shaped recession.

  2. Anonymous says

    I doubt that China will be able to raise its consumption rapidly without creating a state pension system, and a unemployment system. This is one of the prime reasons for Chinas incredible savings rate, that and the need to get on the housing ladder. China needs to clamp down on its property bubble because it encourages still more savings as property rises ever higher.

    If the Chinese did stop buying Treasuries the rates might not go up as much as expected as there will still be a safe haven reason as a result of revolutions in many countries. Also higher rates will boost the value of the dollar and increase the value of the interest payments to China, so less need to sell.

    As for a boost in US housing that is exceptionally unlikely as US consumers are already loaded with debt, and is in all reality now entering a twenty year deleveraging cycle Japanese style. The rounds of QE might hold values up temporarily but until real fiscal measures get through to Main Street expect the US economy to level out in an L shaped recession.

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