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China Backs U S As Deflationary Trend Gathers Pace

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http://www.bloomberg.com/news/2010-06-20/china-backs-obama-with-u-s-treasury-securities-rising-3-to-900-billion.html

China Backs Obama With U.S. Treasury Securities Rising 3% to $900 Billion
By Daniel Kruger - Jun 20, 2010
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A year after criticizing U.S. fiscal policy as “irresponsible,” China’s leaders are showing increasing confidence in President Barack Obama’s leadership of the American economy.
China boosted holdings of Treasury notes and bonds by 2.6 percent to $900.2 billion in March and April, after reducing its stake by 6.5 percent from November through February, the longest consecutive monthly declines in a decade, U.S. data released June 15 showed. The People’s Bank of China said June 19 that it will relax its 23-month lock on the yuan..../
Falling Yields
Following the latest round of purchases, yields on 10-year Treasuries, the benchmark for everything from corporate bonds to mortgages, fell to 3.06 percent, the lowest since May 2009 and below the average 4.35 percent since the U.S. government began reporting foreign holdings of U.S. financial assets in March 2000. The 3.5 percent note due in May 2020 closed last week at 102 11/32 to yield 3.22 percent.
Treasuries are having their best year since 2003, returning 4.51 percent through June 18, according to Bank of America Merrill Lynch index data, as investors seek alternatives to Europe, where Greece and Spain had their credit ratings downgraded amid growing budget deficits. The Standard & Poor’s 500 Index rose 0.22 percent this year...../
Slower Inflation
Longer-term debt is gaining in appeal as inflation slows.
The consumer price index fell 0.2 percent in May, the biggest drop since December 2008,
figures from the Labor Department on June 17 showed.

"Bond markets are not somebody's opinion, they are fact. If rates are falling you can bet on a deflationary outcome. If they rise, its inflation. Right now I am not seeing the key bond markets rising."

I agree.

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If you go to off-topic there is a thread about a US naval fleet heading through the Canal to the Red Sea in recent days - go figure.

Policemen are like buses...

Edited by Alan B'Stard MP

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Deflationary Trend Gathers Pace

:lol: that'll be why gold closed at another record high on Friday then.

Bond markets are not somebody's opinion, they are fact. If rates are falling you can bet on a deflationary outcome.

sovereign bond rates are only falling because governments are printing money to buy their own bonds.

you already know this, RB, so quit playing silly buggers.

there is no deflation and there won't be any.

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:lol: that'll be why gold closed at another record high on Friday then.

Beware when you think you are a winner before you see the opposition`s hand. Fifty years of economic observation teaches you much.

Toilet Rolls in a lot of situations can be more useful than that shiny stuff. ;)

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  • 141 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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