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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