Fannie in the United States and the premises of the United States and the two government-funded mortgage institutions of the deep difficulties, the Bush administration called on the Chinese central bank to buy more U.S. government guarantees the mortgage bonds. According to the U.S. Treasury Department on June 30, 2007 issued by overseas holders of U.S. securities report, the two companies best five foreign creditors, followed by China, Japan, the Cayman Islands, Luxembourg and Belgium. The report showed that China's holdings of U.S. institutions of 376.326 billion U.S. dollars of long-term bonds, including asset-backed bonds to 206 billion U.S. dollars.
Asset-backed bonds is mainly mortgage bonds, such bonds from Fannie Mae and premises of the United States and the two agencies issued or guaranteed.
U.S. Housing and Urban Development Department, Jackson is currently visiting Beijing to try to convince the Chinese central bank to buy more U.S. Mortgage Association securities.
U.S. mortgage market has become serious borrowers default, Fannie and premises of the two major U.S. government-funded mortgage institutions bogged down in difficulties. In this context, the U.S. government to send the Department of Housing and Urban Development Minister Jackson visit to Beijing with the intention of the Association for the U.S. mortgage securities to recruit China's foreign exchange reserves this major customer.
It is learnt that the National Mortgage Association to 417 billion U.S. dollars of federal insurance and fixed-rate mortgages provide security.
Last week, Jackson met with the central bank governor Zhou Xiaochuan. Jackson said that the National Mortgage Association than most other institutions better suited to provide mortgage products. He said that Fannie Mae and the United States and the different premises, the U.S. Government National Mortgage Association to provide comprehensive support, the credit risk in the same circumstances, the mortgage securities on the People's Bank of China provided the proceeds from the U.S. Treasury bonds than the benefits of more好.
Jackson also said that with China's commercial banks contacts, such as the Construction Bank of China, talks to buy the support of the Government of the mortgage securities matters. He added that China and the United States are facing the people to provide affordable housing challenges.
According to the U.S. Treasury Department and the Federal Reserve in 2007 "issued by the U.S. Securities and overseas holders of the report" as well as Bloomberg statistics, from 2004 to 2007, China held the U.S. Securities and from the 341 billion U.S. dollars over the Three times, to 922 billion U.S. dollars, of which at least 414 billion U.S. dollars for the United States Treasury bonds (as at April this year).
U.S. Foreign Relations Sese economists estimate that China's purchase of the U.S. Securities and total more than 1 trillion U.S. dollars.
U.S. Housing and Urban Development Department's web site also shows that China is Fannie and premises of the United States and the largest creditor, holding 376 billion U.S. dollars of corporate bonds.
The United States prior to oppose the government took over the premises of the United States and Fannie Mae, especially when foreign creditors, the two companies become a major shareholder. FreedomWorks President of the United States that Matt Kibbe, "the two" security of taxpayer's money on functions of foreign investors to take risks. He pointed out that all government-sponsored enterprise (GSE) bond issue, a statement from the U.S. government is not secured. Investors in these bonds have gained since the state treasury bonds is much higher than the risk premium, it should also bear the consequences of their own, not by American taxpayers to clean up the mess.
U.S. Congressional Research Service published in January this year, the report pointed out that as the low savings rate, the growth in the U.S. economy is seriously dependent on the country's high savings rate of capital. The U.S. government in order to make up the deficit, issuing a lot of Treasuries, half of which were held for foreign investors.
Sese said that China has taken diversified investment strategy, even if Fannie and premises shrinking U.S. bonds, China will not be easily sold. He believes that the U.S. relief plans, if successful reduce the mortgage debt on treasury bond risk premium, will bring great benefits to China. In addition, this initiative is to help strengthen the U.S. dollar, the U.S. dollar will not drop, in the face of pressure from the appreciation of the renminbi will also be breathing space.
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