Should China continue to buy US treasury bonds?

Should China continue to buy US treasury bonds?
Oct 30, 2008 01:46
YVONNE Points: Join Date: Nov 29, 2004 Status: offline	China has accumlated a large amount of foreign exchange reserves. What is China going to do with such a great deal of money? Some bank managers suggest that China should continue to buy US treasury bonds because China hasn't found a more secure channel to do investments with its foreign exchange reserves except investing in US treasury bonds. Do you agree? Actually, the PE ratio of US treasury bonds has decreased greatly due to the financial crisis. The other reason is that too many investors have invested in US treasury bonds. Are there any other choices if China decides not to buy US treasury bonds?

Oct 30, 2008 01:46

YVONNE
Points:
Join Date: Nov 29, 2004
Status: offline

China has accumlated a large amount of foreign exchange reserves. What is China going to do with such a great deal of money? Some bank managers suggest that China should continue to buy US treasury bonds because China hasn't found a more secure channel to do investments with its foreign exchange reserves except investing in US treasury bonds.

Do you agree? Actually, the PE ratio of US treasury bonds has decreased greatly due to the financial crisis. The other reason is that too many investors have invested in US treasury bonds.

Are there any other choices if China decides not to buy US treasury bonds?

Oct 30, 2008 11:58	#1
CARLOS Points: Join Date: Sep 10, 2007 Status: Offline	Now that courses are low it would be very wise to buy. Wisely, of course. Some day they might be needed. Surely there will be hard times for China too. When, no one knows, but they will come as a Russian train. Carlos

Oct 31, 2008 18:06	#2
BITTERSWEET Points: Join Date: Sep 25, 2008 Status: Offline	YVONNE, US treasury has the highest credit rate. Considering current high yield with high discount market value in current depressed market and slow economy, US treasury is a good option to investors.

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