China Should Stop Piling Up Greenbacks, Yu Says in China Daily

If China stops piling up greenback, a big buyer at the Treasury auctions will disappear. China continues to hint at a policy change, yet the news wires are filled with better than expected retail sales, tame inflation numbers, and DOW 11,000. Critical headlines such as this one are buried within the background noise. It's a dream world out there, but eventually someone wakes up the fact that markets must ultimately face reality.

After China parked its savings in U.S. Treasuries it needs to know if America can honor those obligations when they are due, Yu said. China may face capital losses in the future after building up its holdings of U.S. currency, Yu said.

Source: bloomberg.com