Ron Johnson retweetou
Note the hand wave here. China’s quoted 10 year yield is for “onshore” borrowing. It’s an internal yield actively managed by the CCP and the PBOC. It’s a huge market now, on par with the UST. But, it has no external liquidity.
It is just as likely a massive debt-fueled bubble as we’ve ever seen.
By contrast offshore CNY bonds is a sub $500 billion market.
One of these two countries is a big energy exporter, not borrowing to buy oil, but rather selling its excess. Luke making this equivalence here is really disingenuous.
Both of these countries sell USD debt into the global market. One does it to encourage the use of its currency. The other does it because people want it. The borrowing spread between the two in international markets is negligible and very volatile.
China isn’t the US’s adversary, and it won’t be our replacement, but it will have to become less mercantilist while the US becomes more so.
Luke Gromen@LukeGromen
Orange: UK 10y yields Blue: US 10y yields Light Green: German 10y yields Dark Green: Japan 10y yields Red: China 10y yields 2008 to today. Everyone is focused on sovereign oil supplies; no one is considering oil supplies in context of the chart below. Big mistake...big...yuge
English
