, Columnist
Debt Market's China Syndrome
The country is dumping foreign currency reserves and holding down prices.
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China is sending ripples through the world’s biggest, most-liquid debt market, but not in an expected way.
Instead of prices rising in the U.S. Treasury market, a traditional haven amid turmoil, China’s confusing policies caused this debt to lose value on Thursday. Here’s why: The more money China ineffectively throws at its problems, the more foreign currency reserves it will be forced to sell. In other words, China will probably be a considerable seller of U.S. and European sovereign debt for the foreseeable future.