A China Business New survey shows that about 71% of Chinese economists believe China will favor gold over US debt:

“In a survey of major Chinese economists, more than two-thirds are reportedly bearish on the prospect of China increasing its holdings of US government bonds, and believe instead the nation should putting more of its hard-earned into gold.

According to a China Business News survey of 70 Chinese economists (including one foreign economist), the exact figure is 71.4% anti-bonds and pro-gold.

75.7% of the economists asked believe that China should increase its holdings of gold, with 48.6% opting for a slight increase while 27.1% think China should pile in.”

The survey also brings to light the question of whether China’s gold reserves should be increased.”

Oh well, the Federal Reserve will just have to buy all those T-bonds, the administraion will be selling this summer…no prob.

China is slowing down its purchases of US Treasuries.  This could be trouble in the near future.  The Economic Populist says:

“Increasingly China is becoming a less and less dominant creditor to America…Other foreign creditors have taken China’s place in buying our debt. In fact, foreign purchases of treasury debt has never been greater…While that should be good news, it isn’t for several reasons….The first reason why this isn’t good news is because of the sheer, overwhelming volume of treasury debt being issued. Despite a massive increase in foreign purchasing of treasury debt, the massive supply of new debt coming on line is swamping it.”

The second reason is that we are only talking about treasury debt. The entire rest of the world, especially the private sector, has stopped purchasing all other types of our debt.

Check out the whole article – it’s worth it.  Here’s one last teaser:

This isn’t a matter of politics – it’s a matter of math. The money simply isn’t there. Foreigners, no matter how hard they try, can’t lend us dollars that they don’t have if they don’t have the trade surpluses to begin with. What’s more, why should they be lending us money when we’ve already proven that our financial system is full of crooks?