Obama's Treasury Department Gives Preference to China Over Federal Reserve

Unarmed Gunman

Unarmed Gunman

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May 2, 2007
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(Reuters) - China can now bypass Wall Street when buying U.S. government debt and go straight to the U.S. Treasury, in what is the Treasury's first-ever direct relationship with a foreign government, according to documents viewed by Reuters.

The relationship means the People's Bank of China buys U.S. debt using a different method than any other central bank in the world.
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Source: Exclusive: U.S. lets China bypass Wall Street for Treasury orders | Reuters

Not even our own central bank, the Federal Reserve can buy T-Bills direct from Treasury according to their own site: FRB: Why doesn't the Federal Reserve just buy Treasury securities directly from the U.S. Treasury?

Strangely enough, US Treasury didn't tell anybody about this special relationship that they've had with The People's Bank of China for the last year, including the Federal Reserve or the primary dealers on Wall Street that are supposed to handle these deals for transparency sake.

So now the People's Bank of China get's a better deal on treasuries than our own central bank, or the central banks of any of our allies, and since they buy directly from the Treasury Department we don't know how much of America's future is being mortgaged to the Chinese.

I'm sure this is gonna work out well.
 


Unarmed Gunman said:
So now the People's Bank of China get's a better deal on treasuries than our own central bank, or the central banks of any of our allies, and since they buy directly from the Treasury Department we don't know how much of America's future is being mortgaged to the Chinese.
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Shouldn't it really be easier to tell how much China is buying? I mean if they buy through the Fed Reserve they don't have to tell us shit but at least you should be able to submit a request for information and (eventually) get it.
 
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Rage9 said:
Shouldn't it really be easier to tell how much China is buying? I mean if they buy through the Fed Reserve they don't have to tell us shit but at least you should be able to submit a request for information and (eventually) get it.
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They don't buy through the Federal Reserve, they buy through primary dealers on the open market. The Federal Reserve has to buy U.S. debt on the open market too. Only China gets to go straight to Treasury.

Normally that information would be public if done on the open market. I suppose you can still get access to some of the information via FOIA unless they decide to redact it for "national security" reasons..
 
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