[grimtrigger]

> But that's all it is. It's not an investment.

Ridiculous, simply untrue.

Currency manipulation explains the conversion from yuan to dollars, but not from dollars to t-bills.

Why would China convert dollars to t-bills if they didn't see t-bills as a better investment than dollars?

[k2enemy]

It is explained in the article.

   But the Chinese government for various reasons
   wants to subsidize Chinese manufacturing. So they 
   want to send those dollars they accumulate back to 
   the United States.

China wants to send the dollars back to the US so that we can repeat the cycle. They could do it by buying US goods or stocks and the author explains why they don't. So the alternative is to buy treasuries.

[scott_s]

I mostly agree, but they don't really have much of a choice. They have to put the dollars somewhere, and when you're dealing with that many, Treasury bills are really the only game in town.

[grimtrigger]

Why not a commercial bank or an investment fund?

[scott_s]

China has about $1.2 trillion (with a 't') in Treasury bills. US GDP last year was about $15.7 trillion.

Bank of America has about $2 trillion in assets. If the amount of money you give to a bank is more than half its current assets, then your relationship to the bank is fundamentally different than anyone else. You're not a customer. You're an owner. That's the scale of money that we're talking here. Once you have this much money to store, it becomes clear that there's no such thing as a completely safe place. But, out of all of the unsafe places, US Treasury bills are less unsafe than everything else.

[yxhuvud]

Because they see it as an investment in their own industry.