Not only does China own us financially (holding nearly $1 Trillion in our bonds), not only does China supply our Wal-Marts, but now China controls the future of our housing market? Amazing.
Ever have someone steal your wallet when you were passed out drunk in the bushes?
Home Buyers Could See Higher Rates if China Curtails U.S. Treasury Purchases
NEW YORK (AP) -- China's recent signal that it may diversify its foreign investments in 2006 has mortgage industry watchers concerned that if China buys fewer U.S. Treasury securities this year, it may drive interest rates higher and pour more cold water on the real estate market.
Last week, China's foreign currency regulator said its plans for 2006 include "actively exploring more efficient use of our FX (foreign-exchange) reserve assets" and "widening the foreign exchange reserves investment scope." While China's central bank said Tuesday it has no plans to sell dollars from its $800 billion-plus foreign reserves, some analysts predict China may buy less U.S. government debt at Treasury auctions this year.
While Hackel believes the change in China's buying of Treasuries should result in a marginal increase in mortgage rates, David Olson of Wholesale Access, a firm that tracks the mortgage banking industry, believes mortgage rates could be as much as half a percentage point higher.
"I don't think they (China) are going away completely, but if they do then we're going to have quite a runup in rates," said Olson.
January 11, 2006
Posted by blogger at 1/11/2006