Will central banks look for alternatives to the dollar as reserves?
*Bloomberg, by Belinda Cao, August 3, 2010
”Treasuries Lack Safety, Liquidity for China, Yu Yongding Says
U.S. Treasuries fail to provide safety or liquidity when it comes to managing China���s $2.45 trillion foreign-exchange reserves, said YuYongding, a former central bank adviser.
���I do not think U.S. Treasuries are safe in the medium-and long-run, ���Yu, a member of the state-backed Chinese Academy of Social Sciences, wrote yesterday in an e-mailed response to questions. China is unable to sell the securities in a ���big way��� and a ���scary trajectory��� of budget deficits and a growing supply of U.S. dollars put their value at risk, he said.”
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