Asbytec

China Continues To Consider U.S. Treasuries Its Best Option

China needs to finance at least 6% growth to keep the migratory flow of workers into the urban areas from reversing. How do you think they will finance that. Right, through stimulus packages funded from reserves. That's plan B.

Plan A is to do whatever it takes to keep American consumption flowing. And investing in American debt will help. They certainly do not want to deplete their reserves. Huge reserves have given them a voice on the international stage. They will not give that up lightly. As mentioned above, China will do what's in it's own best interest.

Still believe China will diversify into the euro on a massive scale? Think again, the EU is in serious, serious trouble, more so than the US. German backs are more heavily leveraged than US banks and England has no real industry outside of the financial industry.

I believe the author is dead on, in addition to the reasons I assert are true.