Despite a little 5 percent hiccup in the Chinese stock market—most likely engineered—it is now becoming ever more official that the Chinese regime has lost control.
According to reports by Bloomberg, insiders have confirmed that China is heavily selling U.S. Treasurys on the market in order to contain the yuan devaluation that started two weeks ago. Because the volume is so large, Chinese representatives are speaking to their U.S. counterparts to avoid market turmoil—with limited success.
Société Générale estimates the amount sold in the last two weeks to be higher than $100 billion, and if this rate continues, we could see sales of over $500 billion for the year easily, much higher than a previous estimate of $304 billion. This could have a substantial impact on Treasury yields and therefore U.S. financial markets.
