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<p>[QUOTE=&quot;InfleXion, post: 2248417, member: 29012&quot;]China has bene selling USTs all summer. First it was via proxy through Belgium, but since their stock market started crashing they&#039;ve been doing it outright to free up funds to throw at the bonfire. This is a pretty important development, but in my mind is more of an example of the writing on the wall than the straw that will break the camel&#039;s back.</p><p><br /></p><p>The Fed can always step in and buy anything that doesn&#039;t sell if they need to, but they won&#039;t do this unless they absolutely have to since it would amount to an admission that their policy has failed (even though that&#039;s already been admitted, but isn&#039;t widely known), and that QE to infinity is a reality.</p><p><br /></p><p>QE3 was the first QE program that was not inflationary because it was done with the expectation that it was the last hurrah. So even though it was inflationary at face value it was more so an opportunity for people to get out of the way of what we are experiencing now. Any future QE means there&#039;s no such thing as a last hurrah.</p><p><br /></p><p>I also do not believe that China cares whether or not they ever get their money back for the USTs they are holding or out of their stock market. They have a substantial gold stockpile, and a financial collapse would leave them in a very wealthy position regardless.</p><p><br /></p><p>If you look at how quickly China&#039;s market ran up and then back down over the last year, it&#039;s hard to argue that this wasn&#039;t done deliberately as anyone who knows a thing or two about investing knows that a YoY return greater than 8% is a ponzi scheme. The Shanghai Composite Index was up over 60% at one point earlier in the year. If anybody over there cared about the integrity of their markets they would have intervened before it got so frothy.[/QUOTE]</p><p><br /></p>

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