the visible hand

it is the theory which decides what can be observed – einstein

Archive for September 6th, 2007

Fistfull of dollars: China plays hardball with US Treasuries…

Posted by ecoshift on September 6, 2007

Is China quietly dumping US Treasuries?
By Ambrose Evans-Pritchard
Last Updated: 12:25am BST 06/09/2007

A sharp drop in foreign holdings of US Treasury bonds over the last five weeks has raised concerns that China is quietly withdrawing its funds from the United States, leaving the dollar increasingly vulnerable.

Data released by the New York Federal Reserve shows that foreign central banks have cut their stash of US Treasuries by $48bn since late July, with falls of $32bn in the last two weeks alone.

China threatens ‘nuclear option’ of dollar sales – Telegraph
By Ambrose Evans-Pritchard
Last Updated: 8:39pm BST 10/08/2007

The Chinese government has begun a concerted campaign of economic threats against the United States, hinting that it may liquidate its vast holding of US treasuries if Washington imposes trade sanctions to force a yuan revaluation.

Two officials at leading Communist Party bodies have given interviews in recent days warning – for the first time – that Beijing may use its $1.33 trillion (£658bn) of foreign reserves as a political weapon to counter pressure from the US Congress.

Shifts in Chinese policy are often announced through key think tanks and academies.

Described as China’s “nuclear option” in the state media, such action could trigger a dollar crash at a time when the US currency is already breaking down through historic support levels.

It would also cause a spike in US bond yields, hammering the US housing market and perhaps tipping the economy into recession. It is estimated that China holds over $900bn in a mix of US bonds.


Posted in ecoecon | 3 Comments »

Chinese Pulp Market Rises, So Will Prices Elsewhere

Posted by ecoshift on September 6, 2007

Thanks to “gulo gordo” for drawing these developments in the pulp market (see comments) to my attention… S/he asks a good question:

“Is that good for sustainable foresty? And what impact are these trends having on PL’s bankruptcy?

Inquiring minds, not to mention ravenous mustelids, want to know.”

Any takers?

As the Chinese Pulp Market Rises, So Will Prices Elsewhere This Fall
Pulp and Paper Network / 3G Publishing
8/11/2006 10:11:36 AM

The Chinese spot pulp market, which has been a reliable indicator of the future direction of pulp prices in western markets, provides no sign of any slowdown ahead despite the fact that prices there have been on a steady climb since the beginning of the year.

Following rapid acceptance of $20/tonne hikes in July by Chinese buyers of North American, Chilean, and Russian softwood, Arauco announced a $20 increase for its radiata pine pulp for August, putting its price at $640/tonne. That was followed by $20 moves from Canadian producers Catalyst Paper, Weyerhaeuser, Canfor and Pope & Talbot to put the August price for NBSK in China at $660/tonne.

There were no announcements in North America or Europe for August by any pulp producer. In July, however, NBSK reached the list price of $750/tonne in the US, which is the highest it’s been since early in 1996. And in Europe, the transaction price for NBSK hit a six-year high of $705/tonne.

Posted in ecoecon | Leave a Comment »