Dear China: Please Buy 50 Year Bonds, Sincerely, US Treasury

[rdgmail]

Dear China:

Oh please buy about $5 trillion in 50 year bonds at, say, 4% interest. We promise to pay you back (in 50 years). I'm sure the dollar will be doing great then. And anyway, $5 trillion would go a long way to improving the world's economy right now and we'd probably use some of it to buy stuff made in China. Win-win.
Sincerely,
U.S. Treasury

Related article . . .

NEW YORK (MarketWatch) -- The notion that the Treasury Department could issue a 50-year bond surfaced in the bond market Tuesday, said David Ader, head of government bond strategy at RBS Greenwich Capital, though Ader says he doesn't think Treasury will make such a move. The speculation comes ahead of Wednesday's announcement of how much in debt the U.S. plans to issue next week and any further changes to its debt issuance calendar. Advisers to the Treasury, after last quarter's meeting, said they considered 50-year bonds but opted not to recommend that option. The government has resumed selling 3-year and 7-year notes in recent months to help spread out its increasing financing needs. Instead of 50-year bonds, which would be the longest security ever issued by the U.S., the Treasury may prefer to sell 30-year bonds more often, said Ader. A spokesman for the Treasury Department was unavailable to comment, though as a policy declines comment on changes to debt issuance except after announcing plans. Treasury prices of most maturities fell Tuesday, pushing yields up. Thirty-year bond yields rose 14 basis points to 3.97%.

[audrey_girl]

Re: Dear China: Please Buy 50 Year Bonds, Sincerely, US Treasury

Dear China:

Oh please buy about $5 trillion in 50 year bonds at, say, 4% interest. We promise to pay you back (in 50 years). I'm sure the dollar will be doing great then. And anyway, $5 trillion would go a long way to improving the world's economy right now and we'd probably use some of it to buy stuff made in China. Win-win.
Sincerely,
U.S. Treasury

Related article . . .

NEW YORK (MarketWatch) -- The notion that the Treasury Department could issue a 50-year bond surfaced in the bond market Tuesday, said David Ader, head of government bond strategy at RBS Greenwich Capital, though Ader says he doesn't think Treasury will make such a move. The speculation comes ahead of Wednesday's announcement of how much in debt the U.S. plans to issue next week and any further changes to its debt issuance calendar. Advisers to the Treasury, after last quarter's meeting, said they considered 50-year bonds but opted not to recommend that option. The government has resumed selling 3-year and 7-year notes in recent months to help spread out its increasing financing needs. Instead of 50-year bonds, which would be the longest security ever issued by the U.S., the Treasury may prefer to sell 30-year bonds more often, said Ader. A spokesman for the Treasury Department was unavailable to comment, though as a policy declines comment on changes to debt issuance except after announcing plans. Treasury prices of most maturities fell Tuesday, pushing yields up. Thirty-year bond yields rose 14 basis points to 3.97%.

Dear Amerika:

Thanks so very much for the kind offer, but I am a little short of funds this month.

You see, I have been on a whirlwind tour of the world and you wouldn't believe the bargins that I found...

for example:

in Austrailia:

http://www.stratfor.com/sitrep/20090...s_takeover_bid

http://news.bbc.co.uk/2/hi/business/7221710.stm


in Iran:

http://www.latimes.com/news/printedi...,6808983.story


In Russia:

http://www.moneymorning.com/2009/04/...ia-oil-accord/


In Brazil:


http://www.bloomberg.com/apps/news?p...0Po&refer=news

tee hee tee hee

giggle giggle

best of luck selling your bonds

give my very best to Barrack

Love and Kisses

- China

[rdgmail]

Re: Dear China: Please Buy 50 Year Bonds, Sincerely, US Treasury

Dear China:

Listen, We're in a bind over here. Because you're a friend, err, business partner, umm, ok your our bank. Anyway, can you at least spare a couple trillion dollars? I mean, we're in this together, right? Sure the Fed can expand it's balance sheet to keep bond rates artificially low for awhile, but if we don't get traction pretty soon, that could end pretty badly for both of us. You wouldn't want to see a disorderly decline of the dollar, would you? Come on, please keep buying Treasury bonds- if not 50 year bonds, maybe ten year bonds. Thanks in advance.

-U.S. Treasury

[rjwjr]

Re: Dear China: Please Buy 50 Year Bonds, Sincerely, US Treasury

Dear Amerika:

Thanks so very much for the kind offer, but I am a little short of funds this month.

You see, I have been on a whirlwind tour of the world and you wouldn't believe the bargins that I found...

for example:

in Austrailia:

http://www.stratfor.com/sitrep/20090...s_takeover_bid

http://news.bbc.co.uk/2/hi/business/7221710.stm


in Iran:

http://www.latimes.com/news/printedi...,6808983.story


In Russia:

http://www.moneymorning.com/2009/04/...ia-oil-accord/


In Brazil:


http://www.bloomberg.com/apps/news?p...0Po&refer=news

tee hee tee hee

giggle giggle

best of luck selling your bonds

give my very best to Barrack

Love and Kisses

- China

Dear China,

Best of luck selling our bonds, eh?!

If you thought the tainted dog food and lead-paint toy "scares" hurt your exports, you ain't seen nothing yet.

Good luck selling your crap.

Sincerely yours.
U.S. Treasury

cc:State Department, Department of Defense, Ralph Nader

[charliebrown]

Re: Dear China: Please Buy 50 Year Bonds, Sincerely, US Treasury

forget 50yr treasuries ...

I have some 100yr RMBS for sale here. housing always goes up right?

[Supercilious]

Re: Dear China: Please Buy 50 Year Bonds, Sincerely, US Treasury

And now the reality check:

http://blogs.cfr.org/setser/2009/04/...ly-the-charts/

There is a very widespread sense that the US “needs” China more now because it is issuing more Treasuries to finance its fiscal deficit.
That isn’t quite true. As a result of the crisis, the US consumer has started to save and American businesses have reduced their investment, so the US “needs” to borrow a lot less from the rest of the world. The US needs to borrow from the world when private Americans do not want to save and the US running a large trade deficit, not when private Americans want to save and the trade deficit is down.
The US government is borrowing more, from almost everyone. But other sectors of the economy are borrowing a lot less.

[c1ue]

Re: Dear China: Please Buy 50 Year Bonds, Sincerely, US Treasury

And now the reality check:

The article notes that the trade deficit still exists and makes the argument that China's trade surplus must be invested in Treasuries as they are the only game in town.

Yet we've already seen China pouring money into stocks of various metals including gold, buying resource companies, providing dollars for trade swaps, and so forth.

This is not mentioned in the Setser article at all.

The mechanism Setser alludes to is theoretically possible, but is hardly the only avenue available for China to invest its US trade surplus dollars.

[audrey_girl]

Re: Dear China: Please Buy 50 Year Bonds, Sincerely, US Treasury

Dear China,

Best of luck selling our bonds, eh?!

If you thought the tainted dog food and lead-paint toy "scares" hurt your exports, you ain't seen nothing yet.

Good luck selling your crap.

Sincerely yours.
U.S. Treasury

cc:State Department, Department of Defense, Ralph Nader

Dear Amerika -

Very sorry if my earlier response upset you.

Please don't be upset. I do have plans to invest once again in your country in a couple of years, but not just right now and not in Treasuries again.

In fact, I have started a list of some of the items I will probably take off your hands in a few years when they don't quite cost so much (in their entirety):

jnj
abt
msft
cop
emr
nem
apa
etc. etc.

There is also some lovely timberland in Yosemite and Yellowstone that I hope you don't mind cutting down and sending to me, as well as having PetroChina drilling off of your California and Florida coast.

I don't expect this to be too much of a trouble a couple of years down the road with the people ruling (eh sorry, I mean running your country) - like the Bush folk, Clintons, that wonderful Mr. Paulson and now that lovely Mr. O.

I mean just think about how George almost gave away control of all your ports just a year ago! And how fast Mr P and your Congress guaranteed all my Fannie and Freddie paper too (and in only a WEEK!


Take care and best wishes

Your friend -

China

[GRG55]

Re: Dear China: Please Buy 50 Year Bonds, Sincerely, US Treasury

And now the reality check:

http://blogs.cfr.org/setser/2009/04/...ly-the-charts/

The "reality" doesn't look quite so rosy to this observer.

Previously US private savings were low, private consumption was high, and the difference largely made up with foreign borrowings.

Now the statistics say private savings are increasing, private consumption is falling, and the trade deficit is narrowing.


Two observations:

1. The trade deficit is narrowing because imports are falling faster than exports...but both are still falling...not a good sign for a sustained increase in the private savings rate. You have to earn it before you can save it, and until the US private sector figures out how to sell something to markets external to the USA I don't see how any true savings rate increase is sustainable [and yes I understand the repayment of debt is measured as "savings"];
2. The US private sector savings are not really being saved in any normal sense of the word...they are in fact still going to consumption, the only difference being those "savings" are being funnelled through your friendly Federal Government instead of directly through the local WalMart. There is virtually nothing that the "multi-front war, bail-out-everything, Pelosi-pork-politics" US Federal Government is spending money on that could pass for investment.

It's truly unfortunate that "Swine Flu" will not have any effect on the consumption of one type of pork...the kind they serve on Capital Hill. :rolleyes:

[cobben]

Re: Dear China: Please Buy 50 Year Bonds, Sincerely, US Treasury

"Best of luck selling our bonds, eh?!"

No, no, this is a civilized world, no open threats or scare tactics, please!

Something more like this:

Fed advisory bulletin nr 123456.

"Unfortunately our database over foreign treasury & agency debt holders has been destroyed in a freak accident, and as it turns out no backup has been taken for 25 years, an administrative oversight which will be corrected as soon as possible.

Any foreign holders of said debt will thus as a matter of course be required to provide proof of purchase, only the original paper documents are acceptable, and each will be duly vetted by our forensic experts. No further interest payments will be made until we have completed this process. We will keep you advised of our progress in this matter over the years, please do not call us.

Yours truly,
the Fed"

[rjwjr]

Re: Dear China: Please Buy 50 Year Bonds, Sincerely, US Treasury

"Best of luck selling our bonds, eh?!"

No, no, this is a civilized world, no open threats or scare tactics, please!

Something more like this:

Fed advisory bulletin nr 123456.

"Unfortunately our database over foreign treasury & agency debt holders has been destroyed in a freak accident, and as it turns out no backup has been taken for 25 years, an administrative oversight which will be corrected as soon as possible.

Any foreign holders of said debt will thus as a matter of course be required to provide proof of purchase, only the original paper documents are acceptable, and each will be duly vetted by our forensic experts. No further interest payments will be made until we have completed this process. We will keep you advised of our progress in this matter over the years, please do not call us.

Yours truly,
the Fed"

You are right, my letter was not very PC. Yours in much better, and the level of incompetence it reflects is so very believable.