Posts tagged 'Taper'

TIC Tock for China’s USTs?

Earlier on Tuesday we proposed that one of the reasons gold was rising was because the market, despite the taper, was still being overloaded with liquidity relative to the number of safe US assets in circulation.

But we’ve also speculated in the past that if and when China begins to unwind its US Treasury stock, as it may be forced to if it needs to defend the RMB from devaluation, then the Treasury stock it releases could end up injecting a fair number of dollar assets — at least on a temporary basis — into the global dollar system.

The sequence of events might consequently look something like this: Read more