Told ya there would be screaming headlines in today’s papers that China is dumping dollars.
We also told you it’s all a load of hooey.
It is not until the last paragraph that the WSJ tells you everything they have written in the story is bunk.
Analysts caution that the U.S. data need to be taken with a grain of salt. The Treasury International Capital system collects data on millions of records to calculate foreign holdings of U.S. securities. But correcting for biases in the data, in particular correctly identifying country ownership of securities held in custody in third countries, is difficult. Typically the result of this bias is to underestimate China’s holdings of Treasurys.
If China did dump a significant percentage of its USD holdings and interest rates stayed near record lows and the dollar held reasonably steady than I am a very happy chappy and the US Treasury secretary should be as well.
