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China Is Back As Top US Treasury Holder With $894.8 Billion, After Major Treasury Holdings Revision Takes USTs From UK And Gives To China
The US Treasury has issued its annual preliminary US Holdings report for June 2009. While the data for the June 30th period is obviously stale, what is notable is that the UST's estimates through December 2009, based on survey data, put China higher by about $140 billion compared to the previously disclosed number of $755 billion, at $894.9 billion. Alternatively, Japan which was consider the top holder of US Treasuries with $769 billion, saw its estimated holdings decline to $765.7 billion. This revision puts China back at the top with a commanding lead of nearly $140 billion. The revised Treasury report also indicates that as of June 30, the UK was the largest holder of US equities at $278 billion, Canada second at $242 billion, and the Caymans (i.e., hedge funds) third at $227 billion. Also, China was the largest combined holder of US securities of all kinds at nearly $1.5 trillion, with Japan and the UK second and third, respectively, at $1.27 trillion and $813 billion.
It should still be pointed out that Chinese UST holdings have been declining since July 2009, when they peaked at $940 billion, while both Japan and the UK saw their biggest holdings at December 31, 2009.
As for the source of the revision, see chart below:
It is obvious that as the UST added about $140 billion to each preliminary Chinese bond holding per month, it took out $125 billion from the UK (each month). This is sufficient evidence that indeed the UK has been serving as a proxy buying center for China, following the TIC revision.
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Sounds like a shell game.
Is it just me, or does the quality of US financial data really suck? Maybe, I'm just paying closer attention now, but I do not recall revisions of preliminary figures to be as signficant as they are these days.
Revisions are huge and economists estimates are consistenly off
Assuming for the moment they are not made up on the spot, is government sampling really that bad?
Not you. Like using an abacus to count the data for data entry into a supercomputer.
I hope they choke on it.
I read recently that Japan is now the top holder of Treasuries. China sold $34 Billion in December.
http://www.guardian.co.uk/business/2010/feb/17/china-sells-us-treasury-bonds
they are playing games.
nevermind...
So little Britain decided not to hide China's paypa! Sorry China, you will have to hold and carry all your bags on your way out of the Anglo-Saxon Ponzi Party. The Brits had to move the Dough because the Doelarr is about to get the floor dropped out from under it, and the sterling is weak enough (Jim Rodgers says it only has a few weeks left as a functioning currency). I really think this is the top of the market in a deflationary scenario, however I am pretty sure that due to the "Jobs Package" lendiing requirements, among other things (the continuation of debasing the currencies), we will move into a hyperinflationary scenario (in earnest I think the HYPE began a few weeks ago, and the market is digesting this news now, with a few burps and hiccups).
They let them buy the 2 for 1 special sales and didn't want everyone else to get jealous.
I think we need a new law.
Revise a financial data.
Face the crater.
A trillion dollars is not what it used to be.
A trillion here and trillion there, pretty soon you're talking about real money.
Whats a couple hundred billion between friends?
None of this should be any surprise to anyone who'd been reading Brad Setser while he was still blogging. IIRC he'd routinely adjust the TIC data based on his analysis of past revisions.
I'm wondering what he's doing there in Geithner's Treasury...
Thank you for this. Following the TIC flows would be a great addition to your stellar work.
Not very meaningful due to beneficial holdings concealed in street names....
good discussion led by Professor Pettis here.
http://www.mpettis.com
China bitchez!! Welcome our overlords. Soon China will own all our asses. Nihao Ma bitchez.
There's a reason I'm studying Chinese: Need to be able to say, "Yes, Master," in the correct language. :(
While only two days ago, we were once again sitting the precipice of a full on, total systemic collapse brought on by the teetering PIIGS.....
Within a span of less than 48 hours, more "Resilient Consumer" stocks bolted up towards new, 52-week highs:
And as far as China goes, here's Rasputin's take on the whole matter....
You know the old saying: "Location, location, location"?
Rasputin - Sat, Feb 27, 2010 - 08:09 AM
Well, our entire economy/monetary system depends on a similar homily, or several actually:
1. "Housing, housing, housing"
2. "China, China, China"
...and:
3. "The Fed, the Fed, the Fed"
Regarding point #1, housing, not ONLY are there approximately
thirteen trillion fiatscos at stake in pure mortgages, there are also
trillions more interms of MBS and related instruments, the value of
which was predicated on the premise of ever-rising-to-the-sky McMansion
prices.
Literally everyone from individual homedebtors, to banks, to
Fannie/Freddie, to Wall Street gamblers, to federal, state and local
governments to the Federal Reserve itself has a vested interest in
perpetuating the housing Ponzi scheme.
However, as Calculated Risk blog has so aptly documented here:
http://calculatedriskblog.com
...McStucco sales continue to plummet and even AFTER the Fed and
Uncle Gorilla have thrown everything including the kitchen sink at the
collapse, prices have barely recovered off their lows.
Which brings us to point #2: China. In order to continue to fund
homedebtors and exposed financial gamblers, Uncle Gorilla must continue
to convince his already-skittish Chinese debtmasters to buy his debt at
low interest rates.
Since China is stuffed to the gills with well over a trillion
fiatscos in U.S. Treasuries (having handed back to the U.S. most of the
Agencies they formerly held), it is unlikely the Communists will be
willing to swallow another couple of trillon in IOUs.
Which leads us to point #3, the Fed. Having already monetized
nearly a trillion and one-half fiatscos of Agencies/Treasuries in one
year, the Fed is now also massively expoxed to any further collapse in
McBox prices and sales.
(Ras Conclusion): Since soooo many domestic entities are
dependent on the housing Ponzi continuing to expand and since China is
probably near the limits of their debt tolerance with Uncle, that
leaves the Fed to implement "QuantSleaze 2.0 thru 5.0", beginning NO
LATER than a few weeks or months after the "official" end of this
pressent "QuantSleaze" at the end of March.
Unless, of course, you subscribe to the theory that Bernanke will
now just stand idly by as the McMortgage collapse drags down ten
million homedebtors, Uncle Gorilla himself, state and local goverments,
every single bank, Wall Street gambler and derivatives player and even
the Fed's own balance sheet.
Personally, I don't believe for a minute--based on all of
Bernanke's previous actions--that the Fed would pull such a suicidal
stunt.
So, going forward, look for more Uncle and Fed induced programs,
schemes and scams to prop housing; many of which I have predicted would
come and have, such as nationalizing Fannie/Freddie, foreclosure
forebearance and Fed monetization of MBS.
They simply have no choice but to increase and extend these desperate measures in order to save their own skins.
The U.S. nightcrawler be damned.
Nice to see that time has mellowed him...
I now know why the Fed and the Chinese are "washing" the bond sales through the UK. Anyone see Hillary Clinton talking before Congress on our increasing debt in the US being a "national security issue"? Was just yesterday I believe.
I think there are some now in Congress wondering if China could pose a risk if they own too great a percentage of our debt. Threaten us with selling to crash the dollar/bond market unless we do their bidding.
So instead of not selling the Chinese any more debt, the Fed just hides the sales. All this transparency out of Washington and the Federal Reserve is blinding me.
End the Fed.
instead of not selling the Chinese any more debt, the Fed just hides the sales. All this transparency out of Washington and the Federal Reserve is blinding me
If you read the telegraph, ambrose wrote this quote from Wen Jiabao:
One thing is clear: Beijing suspects that the US Federal Reserve is engineering a covert default on America's debt by printing money. Premier Wen Jiabao issued a blunt warning last month that China was tiring of US bonds. "We have lent a huge amount of money to the US, so of course we are concerned about the safety of our assets," he said.
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/516012...
http://www.telegraph.co.uk/finance/currency/7300770/Concerns-grow-over-C...
Before everyone accepts the US accusation that China has been buying t-bills from the UK, look at the above. The whole point of this fake news is to make sure no one will catch the fed from monetizing the debt.
If you look at the long view China has been digging their way out of the dollar trap since 2007. It was 2.4 Trillion back then, even with the correction, the numbers speak for themselves, there are only $800 Billion left now. That is a huge number.
This is why the west is losing to China. China plays the chessboard in the long term view, it may sacrifice an officer and may let the west feel that they are winning in the short term but in the big picture little does the west know they are trapped and the only ending is a Chinese checkmate.
Read Leap2020 article from April of 2009:
http://www.leap2020.eu/When-China-prepares-its-Great-Escape-from-the-dol...
If you read the telegraph, ambrose wrote this quote from Wen Jiabao:
One thing is clear: Beijing suspects that the US Federal Reserve is engineering a covert default on America's debt by printing money. Premier Wen Jiabao issued a blunt warning last month that China was tiring of US bonds. "We have lent a huge amount of money to the US, so of course we are concerned about the safety of our assets," he said.
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/516012...
http://www.telegraph.co.uk/finance/currency/7300770/Concerns-grow-over-C...
Before everyone accepts the US accusation that China has been buying t-bills from the UK, look at the above. The whole point of this fake news is to make sure no one will catch the fed from monetizing the debt.
If you look at the long view China has been digging their way out of the dollar trap since 2007. It was 2.4 Trillion back then, even with the correction, the numbers speak for themselves, there are only $800 Billion left now. That is a huge number.
This is why the west is losing to China. China plays the chessboard in the long term view, it may sacrifice an officer and may let the west feel that they are winning in the short term but in the big picture little does the west know they are trapped and the only ending is a Chinese checkmate.
Read Leap2020 article from April of 2009:
http://www.leap2020.eu/When-China-prepares-its-Great-Escape-from-the-dol...
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