Friday, October 9, 2015

Central Banks Start Dumping U.S. Debt

Check out what this article said in the WSJ yesterday;

Central banks around the world are selling U.S. government bonds at the fastest pace on record, the most dramatic shift in the $12.8 trillion Treasury market since the financial crisis.

Sales by China, Russia, Brazil and Taiwan are the latest sign of an emerging-markets slowdown that is threatening to spill over into the U.S. economy. Previously, all four were large purchasers of U.S. debt.

While central banks have been selling, a large swath of other buyers has stepped in, including U.S. and foreign firms. That buying, driven in large part by worries about the world’s economic outlook, has helped keep bond yields at low levels from a historical standpoint.

But many investors say the reversal in central-bank Treasury purchases stands to increase price swings in the long run. It could also pave the way for higher yields when the global economy is on firmer footing, they say.

Some analysts have warned for years that persistent fiscal deficits made the U.S. Treasury market vulnerable to a reduction in foreign purchases. But many investors say they believe longtime holders such as China won’t sell bonds in a way that threatens to disrupt the market.

“I can’t rule out China being a big risk to the bond market but it’s not something that is keeping me awake at night,’’ said James Sarni, senior managing partner at Payden & Rygel in Los Angeles, which manages $95 billion. “While they may decide to sell more Treasury bonds, the transactions are likely to be done in a prudent way.”


First off the line "fastest pace on record" is another way of saying, "fastest pace EVER!!" that always grabs our attention.

And while the article does go on to say that lots of other buyers are stepping in to purchase the bonds that the Central Banks are selling (which is 'good new')....the other paragraph that caught my attention was the one about I put in bold.

Now just imagine, if you can, James Sarni sitting in his Armani suit by the country club pool digging oysters out of the half shell as he contemplates his $95 BILLION of assets he manages for other folks...."Yes, I can't rule out China being a big risk....but I think they will be prudent about it.  Lexi!....can you bring us some more oysters!!  My tee time is in 20 minutes!"

"While people are saying, 'Peace and safety',destruction will come upon them suddenly."

Certainly, we are living in perilous times and the majority of those around us who NEVER CRACK THEIR BIBLES and REFUSE CHRIST are clueless as to what is being set up.

1 John 4
4 You, dear children, are from God and have overcome them, because the one who is in you is greater than the one who is in the world. 5 They are from the world and therefore speak from the viewpoint of the world, and the world listens to them.


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