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Bond Yields Climbing: Could The Chinese Weaponize U.S. Debt?

Published Fri, 21 Sep 2018 03:45:11 -0400 on Seeking Alpha

By SchiffGold
Yields have been on the rise this week in the midst of a bond market sell-off. Two-year borrowing costs hit their highest level in a decade on Wednesday. The yield on the 2-year Treasury climbed to 2.816%. Meanwhile, the 10-year Treasury yield hit a four-month high of 3.07%.
What's going on here?
The most obvious reason for falling bond prices and rising yields is the enormous amount of debt the US Treasury is currently dumping on the market. Despite the "strong economy," the US government is borrowing money like it's in the midst of a deep recession. To cover the growing federal deficit, the Treasury Department announced earlier this summer that it would raise $329 billion through credit markets during the July-September period. The borrowing estimate for the third quarter ranked as the highest since the same period in 2010 - at the height of the Great Recession. It comes in as the fourth-largest level of borrowing on record for the July-September quarter.
But there could be another reason for the recent bond sell-off - the ongoing trade war. There is some fear the Chinese could weaponize their massive holdings of US debt and use it to gain the upper hand in the escalating tariff battle.
This week, President Trump announced a 10% tariff on another $200 billion in Chinese imports. The Chinese retaliated, levying tariffs on $60 billion in US products.
You'll notice that the Chinese are starting to have a difficult time keeping... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
CORNERSTONE TOTAL RETURN FUND 11.46   0.0 0.00 2.74 22.07
ZWEIG FUND 10.83   0.0 0.00 1.44 13.38
LIBERTY ALL STAR EQUITY FUND 6.50   0.0 0.00 0.82 9.98
SPDR DOW JONES INDUSTRIAL AVERAGE ETF TRUST 272.28   0.0 0.00 5.63 2.06
PROSHARES ULTRASHORT S&P 500 29.83   0.0 0.00 0.00 1.95
SPDR S&P 500 ETF 297.74   0.0 0.00 5.42 1.80
POWERSHARES QQQ TRUST SERIES 1 192.20   0.0 0.00 1.49 0.77

CORNERSTONE TOTAL RETURN FUND - CRF
CORNERSTONE TOTAL RETURN FUND - CRF  


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Of Slopes And Flops: The Yield Curve Inversion
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Ignore The Yield Curve, They Said...
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Short And Sharp: Yield Curve Inversion - A False Positive?
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