China Is Selling U.S. Government Debt

In June 2009, China reduced their holdings of U.S. treasuries by 3.1% (see graph below).


Over the past year China has been growing their holdings of U.S. treasuries at an ever decreasing rate and is now reducing their holdings of U.S. government debt (see graph below).


This is a key trend to follow. If this continues interest rates on U.S. government debt could rise significantly as the U.S. needs to raise massive amounts of money due to huge budget deficits.

Data Source For Graphs: U.S. Department of Treasury