China's Dumping Of The Dollar Has Begun

Barclay Chinese Diversification

China, once a proud holder of United States post-World War II debt, is getting scared.

For years the People’s Republic has bought U.S. Treasuries, eventually becoming the largest holder of U.S. debt ($799 BILLION to be exact!). Those days are long gone, though.

During 2009, China hasn’t been buying many Treasuries and has been unloading dollars in a way that makes Geithner shiver at night.

And other big U.S. debt carriers like Japan may follow suit if confidence is lost.

This presentation, courtesy of RBS, takes a deeper look into China’s holdings and associated volumes since 2005. Get ready for shock and awe.

Click here to view the presentation –>

Short-term Treasury Obligations Nose-dived In Late 2008

Source: RBS: China USD Diversification In Charts

U.S. Treasury Bond Holdings Have Declined In The Past Few Months

Source: RBS: China USD Diversification In Charts

Source: RBS: China USD Diversification In Charts

Long-term debt Is Way Down.

Source: RBS: China USD Diversification In Charts

Another view of diversification

Source: RBS: China USD Diversification In Charts

Source: RBS: China USD Diversification In Charts

Heading back to pre-crisis levels

Source: RBS: China USD Diversification In Charts

Both Short And Long-term U.S. Holdings Are Down

Source: RBS: China USD Diversification In Charts

Less and less of China's wealth is flowing into USD assets

Source: RBS: China USD Diversification In Charts

Could it possibly rebound?

Source: RBS: China USD Diversification In Charts

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