The over supply I have been speaking of below and on the news tab is now seeing some demand. I hope it’s enough to lower mortgage rates further.
China was a big buyer of our mortgages and had lost faith in their performance for a bit. They have now come out and said they will resume buying. The reason for this is interesting. The U.S. is the #1 buyer of Chinese exports and if our dollar weakens, or their Yuan strengthens in contrast to our dollar, Chinese products in the U.S. get more expensinve. China does not want the U.S. to slow it’s purchasing, so in turn it reinvests the dollars into our bonds market to help strengthen our dollar. Very smart and interesting.
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