Here’s Where All Those Treasury Bonds are Going…

People often wonder why China buys up so much US debt. What could they possibly use billions and billions of US dollars on? If you remember last year, China was thwarted in a bid to buy out Unocal in what was a blatant protectionist move by a Congress that normally worships at the altar of free trade.

Well, they’ve found some other prospects, and are spending money like water to get what they need. As long as the dollar still has value, expect to see more business stories like this one.

China’s growing economy has a massive need for commodities of all sorts. Oil, steel, concrete, copper, you name it. It’s part of the reason why housing costs (expecially new construction) are jumping in the US. Next time you’re at your local home improvement center, make note of the prices of copper tubing, or even concrete mix. Then when you stop back later in the year, check them again and see if they’ve moved at all. Odds are, they’ll keep on rising like most every other commodity is doing right now. And this is just the beginning of what could be a long cycle of resource shortages…

Hat Tip to KevO at www.peakoil.com.

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