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pparris9: 2 years ago

What will be the long term effect of china buying US securities?

My thought is that this will eventually push money into the corporate bond market.

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Answer 1

dross1958: 2 years ago

There is nothing new about China doing this, they have been buying stocks, bonds, both corporate and treasuries for decades.

All it does because of our spineless politicians who continue to spend money is as you see the country today. They spend more and more.

The long term effects ? China will own whatever Canada, Britain , Germany and France don't already own.

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pparris9: 2 years ago

My thought was more in relation to the cyclical nature of the markets. Stocks, then bonds, then real estate.

I am wondering if we will see another corporate bond boom.

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dross1958: 2 years ago

Probably not for a long time. We seem to be in a stock cycle again. I read the WSJ and Forbes daily, and they have said the outflow from bonds/bond funds has been increasing each month and the money is flowing into stocks.

There is also the matter of Muni bonds and the possibility of states and cities going into default that has been spooking the bond market for the past month

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humblejourney: 2 years ago

It's a scary thought to know just how much US securities are owned by China. Eventually this will weaken the US and China will own the country. The US deficit will continue to grow because China will continue to by more securities.

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