China, Japan and UK Dump $81,000,000,000 in US Treasuries in Just One Month As China Pours Capital Into Gold

China unloaded $9.6 billion in Treasuries, reaching its lowest holdings since 2009 at $759 billion. Japan sold off $27.3 billion in bonds, with the nation now holding $1.0598 trillion in Treasuries, the most of any single country. And the UK also pared back in a major way, leading the pack with $44.1 billion in Treasury sales, reaching a total holdings of $722.7 billion. This trio’s retreat from US debt, combined with China’s aggressive gold accumulation, underscore concerns about a potential strategic shift away from US dollar assets as America faces a $2 trillion deficit and mounting borrowing costs. The moves also come as yields on 10-year Treasuries hover near 4.5%, testing demand as the Federal Reserve continues its quantitative tightening, offloading $60 billion in Treasuries each month. After a six-month pause, China resumed buying gold in November of last year.

Why the Dollar Is Having Its Worst Year Since 2008, and What It Means For You

Nearly all of the dollar’s decline so far this year came over the past week as tariffs on Canadian and Mexican goods went into effect. Even the Canadian dollar and Mexican peso, which theory says should fall on concerns tariffs will plunge the economies into recession, gained against the USD last week.

China Challenged to Keep Yuan Stable as Dollar Rises

The greenback’s weakness in the past two months had given the People’s Bank of China some breathing room to stabilize the yuan, reducing the Chinese appetite for foreign assets along the way.

But since the end of April, the yuan has depreciated 0.6% against the dollar, eroding the 1% gain the Chinese currency made over the previous two months.

China’s Economy Will Be More Competitive Than India’s For Many Years

Nonetheless, the economic weight of the world has already shifted in China and India’s direction. It will continue to do so as their economic reforms move forward. By 2030, China and India, respectively, are expected to be the first and third largest economies in the world, with the largest middle classes that U.S. companies will wish to sell to. 

Regulator tightens rule on mutual fund risky investments

There is no capital requirement on the subsidiaries of the mutual funds except for a minimumof 20 million yuan as registered capital. Industry experts said that many firms do not havesufficient capital to cover the loss of their risky and often less liquid investments.

As of March, 79 mutual funds had set up such subsidiaries which have seen their asset undermanagement surge to 9.84 trillion yuan ($1.5 trillion),  according to data from the ChinaSecurities Regulatory Commission.