It’s one of the top stories on all the financial news sites:

China “worried” about US Treasury holdings - AP
China “worried” about safety of U.S. Treasuries - IHT
White House Seeks to Reassure China U.S. Debt Safe, Deficits Under Control - Bloomberg
China’s premier worried for U.S. investments

Most analysts estimate that China has $1 trillion invested in U.S. Treasuries and notes. That’s roughly half of its currency reserves… And if China decides to sell them - at least, if they sell them all at once - it could slash T-bill values.

That would ultimately slash creditor’s reserves, though, which would be a little like self-mutilation.

I’m not alone in thinking that the move away from T-bills will be more like blood-letting than amputation… And some emerging markets are actually still interested in buying U.S. Treasuries.

Russia, for instance. On March 4, 2009, Russia became the 5th largest U.S. creditor with a total of $116 billion in U.S. T-bills in its coffers.

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About a month ago, I told you all here that Rio Tinto (RTP:NYSE) was in dire straits… But that was only half the story. The rest I told to the exclusive membership of Taipan Insider. Now, as the mining industry continues to make the news, particularly with China Investment Corp,’s (CIC) announcement that it will focus on natural resource investments - rather than make more investments in the failing sectors of finance and real estate - I want to share the rest with you, because it will lead us up to the current situation.

So here’s your exclusive peek at Taipan Insider…

BHP Billiton (BHP:NYSE) is a leading miner in nearly every metal and mineral in the world, with global operations stretching from Mozambique to Peru… Just look at these statistics:

• 3rd largest copper producer
• 6th largest aluminum producer
• 3rd largest nickel producer
• 4th largest gold producer
• 2nd largest uranium producer
• 2nd largest zinc producer
• 4th largest coal producer

That’s a pretty stacked resume…

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The first sentence of a Reuters article on Brazil’s Carinval is certainly… attention catching:

The 10 million extra government-provided condoms are poised, final touches being put on huge floats depicting Queen Cleopatra and Can-can dancers, and the Barack Obama masks are flying off the shelves.

Would have liked to have known the name of the company making those condoms, eh? That extra 10 million is on top of the 45 million already provided at Carnival.

But even “bigger” news to investors like yourselves is the fact that one float’s dancers were wearing costumes costing $13,000… A PIECE! And this in a massive global financial crisis that has caused even some of the mining towns in surrounding Brazilian states to cancel their parades.

By all estimates, though, folks are spending less money this year, and Brazil expects about a 10% drop in foreign tourists to Carnival.

You wouldn’t know it by the looks of Rio, though. I like to have fun, as you’ve read in these pages before (underground pubs in Slovakia, or crazy futbol matches in Argentina), but some of the videos from this year’s Carnival seem… whew… a bit excessive even for my tastes!

Currently Brazil is a little out of favor with investment analysts. Last week, I told Taipan Insider readers that Citigroup thinks Brazil’s market is in for a slide, and that investors shouldn’t buy in until the Bovespa hits 35,000.

I also told them that I didn’t necessarily agree with Citigroup.

Here’s the thing, though, that everybody does seems to agree on: Countries with strong commodity and cash reserves are going to be great markets on the far side of this financial crisis. The problem is, nobody can time when this crisis will end, or which companies will be around to reap the rewards.

For Brazil, there are a lot of choices, like Companhia Vale (RIO:NYSE), which was just downgraded today despite expanding its iron ore customer base in China…

That means RIO has secured more long-term supply contracts, and that’s a sign of longevity. Clearly something that investors should be looking at if they want to buy shares for the long run in this market.

If you are a member of any of Taipan Publishing Group’s publications, you can read my full article online.

On Jan. 28, I told you that mining major Rio Tinto (RTP:NYSE) was in dire need of cash… It needs to pay an $8.9 billion bill by October 2009.

Well, RTP may have found its Knight in Shining Armor, and it’s not long-time rival BHP Billiton (BHP:NYSE). Rather, it’s state-owned Aluminum Corp. of China… or Chinalco. Chinalco already owns 9% of the company, but the two are in talks to buy about $20 billion in assets. Here’s how it would work, as reported by the International Herald Tribune…

“Aluminum Corp. of China, known as Chinalco, would buy bonds convertible into Rio Tinto stock and acquire up to half of some of Rio’s mines.”

The deal is expected to be announced as early as tomorrow, as RTP releases its full-year earnings.

Remember, RTP is looking to offset the massive investment it made in Canada’s Alcan. It went $39 billion in debt to do the deal, and $8.9 billion is due to be paid in October. With metals prices in the dumps, and the currenct economic situation, RTP is scrambling for cash.

Because Chinalco is state-owned, it’s got deeper pockets than many of its competitors. But that also means that if Chinalco acquires a big enough stake, China would - in effect - have “veto” power over any big decisions, like takeover bids.

Like the one BHP put in last November…

BHP has since dropped its bid because of the global financial crisis, but if it decides to renew its bid when metals prices begin climbing again, it might face some difficult opposition.