WEB Notes: This is a big deal. At one point in time the nations of the world needed to hold more treasuries so the US could print more dollars. That was standard practice until the 2008 financial crisis. Nevertheless, if China continues this sell off it will drop the dollar and cause inflation and other nations are not going to stand buy and watch their treasuries become worthless so they may flood the market as well. We have a lot going on right now. Meanwhile, in the commodities market we are seeing deflation.
Source: ZeroHedge | On Tuesday evening, we asked what would happen if emerging markets joined China in dumping US Treasurys. For months we’ve documented the PBoC’s liquidation of its vast stack of US paper. Back in July for instance, we noted that China had dumped a record $143 billion in US Treasurys in three months via Belgium, leaving Goldman speechless for once.