China Is Suddenly Dumping Treasuries

Tyler Durden's picture

While we admit that "suddenly" is not exactly the right word to describe China's selling of US Treasurys, which has been steadily liquidating its UST reserves over the past two years, something changed today, when in a violent move starting around the time of the Trump election was guaranteed after midnight, the offshore Yuan,  the CNH, has been a one way street of non-stop selling, indicative however, of much more than just the relative strength of the dollar.

In fact, as the chart below shows, the selling in the Yuan appears to be closely correlated to today's unprecedented liquidation in US Treasurys...


... which in turn, have seen their biggest absolute jump in yields since the Taper Tantrum in 2013, and the biggest percentage jump in yield on record.


Some context for today's yield move, which as we noted earlier when we described today's "deplorable" 10Y auction, suggests that the Bond Vigilantes, or at least Beijing, are not big fans of Donald Trump at all.


If this is indeed how China plans on "celebrating" the Trump presidency, namely by liquidating billions in US Treasurys on a daily basis, something we have already observed take place for months thanks to the Fed's custody holdings although on a much smaller scale...

... then the financial advisors of the billionaire real-estate mogul are about to be very, very busy. And we certainly can't wait to see how China - in turn - will respond to the inevitable tarrifs, anti-dumping duties and taxes that Trump will retaliate with, and how long before the trade war escalates into something more kinetic.

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konputa's picture

Tylers, crack a bottle of Veuve tonight. You've earned it.



- Fight Club

The Black Bishop's picture

Well, Trump wants to bring home the industry that was outsourced to China and probably reign in the imports. I guess China is trying to stay ahead of the game and get rid of excess bonds before the US tanks in the clean-up process Trump will start.

El Vaquero's picture

We're going to finally get our economic crash AND blame it on Obama? Golden!

Infocat's picture

Hopefully it happens before Trump gets into office. Leftoids are responsible for the Debt Bubble.

bamawatson's picture

hopefully they commence massive in-fighting
leftoids eat their own

knukles's picture

Here it is, kids.
The first challenge to the newly elected president even beofre his Inaguraiton. 
To which he'll respond... "My fault?  I'm not even in office yet!  How can it be my fault?"

JRobby's picture

Rates rise on their own. Bernanke and Yellen go into convulsions simultaneously stricken by the same disease, and die.

tmosley's picture

This is NOT an attack. They are simply taking pre-emptive action because they know that Trump likes to use bankruptcy, and they don't want to be caught with their pants down on January 21st.

mkkby's picture

China has a debt bubble that is bursting.  It is not some trade war going on.  They need to spend dollars to plug up the de-leveraging holes in their own economy.

If china ever runs out of dollars, they will be as truly fucked as any banana republic or african hyper inflator.  It is a quiet, unreported panic going on there.

Did anyone really think vacant cities was a winning business plan?

Once upon a time, the tylers understood things like this.  Now it's just doom porn for click bait.

justin423's picture

Good news:
Trump and Republicans want to balance the budget
Bad news: they also want to default on the outstanding debt and start from a clean slate.

New World Chaos's picture

The puppetmasters are going to crash the economy and blame Trump.  Of course it is doomed to crash anyway- the whole thing is a giant Ponzi scheme.  But they will say "See, we told you deporables that globalization is best for you.  Now we are going to have to fix this mess by creating a worldwide oligarchal-collectivist dictatorship". 

Trump needs to get in front of this ASAP.  I suggest auditing Fort Knox by executive order.  Then, audit the Fed.  He should jail the pedos and re-investigate 9/11 while he's at it.  Make it absolutely clear that an evil Cabal has been running things for a long time and the media is part of it.  Pardon Assange, Snowden, and Manning.  Tell the Intel Cowboys to release the Kraken.  Turn the NSA against the Rothschilds.  Fire and prosecute any obstructionists.  Explain to the public what he is doing.


RumbleGuts's picture

He should jail the pedos??? He is a fucking pedo himself! You don't visit sex slave island for the scenery. ;-) Trump, Hillary and Bill should all share the same cell. They are vile, disgusting people.

Mr.BlingBling's picture

Documentation please, or it didn't happen.

AmandaFawndel's picture

RumbleDGuts = Lying Butt Hurt Homo


How's the Gay Bowel Syndrome today?....holding your stool ok?



Maybe Howard Dean can help?

Scuba Steve's picture

Before you do all of that ... go to the highest levels of military, NSA, Intel and install your own brass and tell them "to clean house on the libtards that have infiltrated the ranks".

Then, start your other purges.

o r c k's picture

The dreams of my hedges. Zero.

AmandaFawndel's picture

We're going to finally get our economic crash AND blame it on Obama? Golden!


If an Obowelmovement plops into the pool at the bottom of the ashkeNAZI jew run media outhouse, and the ashkeNAZIs don't report on it, does it make a sound?

The Jaguar's picture

I endorse this message! Good job to all the Tyler's.

ZH Snob's picture

cool.  spike it, baby.

RiverRoad's picture

Oh heck, throw in several bottles of Cristal and some caviar too.  Champagne is great to wash all that popcorn down with.  Ir's been a long 8 years waiting to avenge the Crash of '08......

Kayman's picture


7 years or so ago ZH was the only sane place to vent.  Now, the seeds have grown, hopefully with roots that cannot be corrupted.

Thank you Tylers and the ZH community.  


retired dude's picture

Agree.  Take a few days off and enjoy your good work!

LawsofPhysics's picture

Well duh, they are having or about to have their "sorry, you fucked up, you trusted us" moment...


SomethingSomethingDarkSide's picture

Sell them all, ya fucking Slants!  Go buy NIRP debt and stuff it.

Jason T's picture

Trade war with China ... Bring it.  

Bill of Rights's picture

Nice!.... I'm of the opinion DEFAULT! and really get this shit storm brewing..

The Jaguar's picture

The popcorn is good this morning, very buttery.

Gold...Bitches's picture

But the salty tears of dejected Hillary/Bernie supporters is about as delicious a libation as one could ever dream into being.

WTFUD's picture

Shit in all the excitement i forgot about the $20 Trill in Debt + whatever Trump finds under the bed. Nah let us not worry about important issues for a while as we bask in glory.

NoDebt's picture

Getting harder and harder to protect that peg, isn't it China?

We're just gonna lean on you a little more and over you go.  Capital flight.... turbocharged.


Kagemusho's picture

There's a flood of BitCoin leaving the Yuan:

The PBOC might want out of Treasuries, but the average Chinese wants out of the Yuan.

brushhog's picture

You mean interest rates will go up and I can finally get a return on my savings?? Horrible!

Omega_Man's picture

no worries... FED will print and buy....

Soul Glow's picture

Until Trump steps into the WH.  Then they'll drop the anvil.

NoDebt's picture

There is no anvil.  The economy sucks and will continue to suck for quite some time yet, despite who's in the WH.  But that's not news.  What WILL be news is the coming admission that things were actually much worse than they had admitted to for the last year or so.  Prepare for a shit-ton of "revisions".


Bill of Rights's picture

Indeed something many are not speaking about...

tmosley's picture

Incorrect. Trump can put in a Fed Chairman that will cooperate with an audit, and allow the market to set rates while they disband.

Arnold's picture

I nominate John Stevens Corzine for Federal Reserve Chairman.


(Testing 'takes one to know one' theory.)


LawsofPhysics's picture

Correct.  In fact between the Fed and all the Primary dealers, there are a lot of middlemen that can be cut out.  The Fed would then really become a government bank (like the BoJ or BoC) closely tied to the executive branch.

wren's picture

Does this mean that we'll have to manufacture our own products again? Oh, darn...

Does this mean we'll have to use our own natural resources now? Oh, darn...

Now people will be able to find jobs other than slinging dope in the inner cities.

beemasters's picture

Things have been so cheap thanks to China, the US has become one of the most wasteful nations on earth. Let's hope situation will improve.

Soul Glow's picture

So basically I'm just going to keep stacking and wait for the paper shitshow to burn.


Kaiser Sousa's picture

dont be ridiculous...

buy some Facebook, Apple, Twitter, SnapClaps...

Soul Glow's picture

I assume you have a nice piece ready for this afteernoon?  Something about how the Fed is holding up the wall even though we all know the levy broke?

Kaiser Sousa's picture

gonna keep it simple...

cause there aint much to say about what we wtinessed last night and this morning...

TheRealDrBill's picture

How does selling treasuries crash the Yuan?  Seems backwards. 

Soul Glow's picture

They are selling Treasuries for dollars, and holding the dollars.  Strong dollar = weak yuan.

ejmoosa's picture

ANd a weak yuan lowers the cost of their goods...

Latitude25's picture

Then using dollars to quietly buy discounted hard assets all over the world so the dollars don't immediately show up as being dumped.  That comes later after the Chinese no longer hold them.  He who panics first out of the dollar, panics best.