theTrumpet.com

Russia and China were the primary sellers of U.S. treasuries in November 2010 as bond yields soared higher that month, according to U.S. government data released on Tuesday. China remains the world’s largest foreign holder of U.S. debt, but it dropped $11.2 billion in November, bringing its total holdings to $895.6 billion. Some analysts see these fluctuations as evidence of profit-taking because China increased its U.S. debt in the months leading up to the Federal Reserve’s announcement of its new bond-buying program. In the same month, Moscow cut its treasury holdings from $131.6 billion to $122.5 billion, Russia’s lowest level since April 2010. “I worry that we could be at a tipping point,” said Eswar Prasad, former International Monetary Fund official. “If the Chinese say ‘We’re not buying any more treasuries,’ this could act as a trigger around which nervous market sentiment coalesces. People could start wondering how the U.S. is going to finance its deficit.”