Will China Unload Its Treasuries on the Fed? They Should!

The Fed has now given China the perfect “out” to begin selling its treasuries. For each treasury the Fed buys, China can dump one on the market without affecting the global supply and demand. They can sell their U.S. government debt back to the U.S. and the American people will be stuck with both the debt, and the obligation to pay it. What a strange world! With the explosion higher yesterday in treasuries, China can sell them for a substantial profit to the Fed and exit laughing their way all the way to the bank. They would be foolish not to!