• Sprott Money
    05/06/2016 - 06:03
    The US, in its own decline, is showing this same self-destructive tendency. The worse things get, the greater the inclination of the citizenry to say, “Carry on, everything’s fine.”

Detailed Look At TIC Flows: August Treasury Purchases By China, Japan And UK Drop To Lowest Total Year To Date

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Sun, 10/18/2009 - 21:20 | 102995 Carina
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Treasuries Show No Lost Appetite With Zero Dollar Returns:


Sun, 10/18/2009 - 21:24 | 102996 NoBull1994
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Buy TBT calls.  Make money.

Sun, 10/18/2009 - 21:56 | 103022 Anonymous
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One may also surmise that these central banks will have the inside line on any future policy shifts, and therefore are adjusting their positions accordingly.

Sun, 10/18/2009 - 22:02 | 103024 TumblingDice
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The increase in exposure to the long end at the expense of the short by China does not compute.

On a different note I wouldn't be too suprised by a complete bust in foreign treasry purchases by the end of the year. All part of the master plan to destroy the dollar with a little help from our friends. Selling long dated treasuries and buy stocks would seem like the most rational move for all players involved if this develops. But what do I know.

Mon, 10/19/2009 - 01:08 | 103117 FischerBlack
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The increase in exposure to the long end at the expense of the short by China does not compute.

They have some big commodity positions going which can be thought of as dollar bearish and since buying the long end of USTs is dollar bullish, there might be some re-positioning of hedges going on. In isolation, though, their bid on the long end seems to be like doubling-down on US deflation, and a vote of no-confidence in Ben.  

Sun, 10/18/2009 - 22:07 | 103027 P Kennedy
P Kennedy's picture

Sounds rational - why try to outbid Ben?

Its odd, China's movement out of Tbills into Tbonds. Watching the movement out of GSEs looked like positioning / leverage. So... that theory goes to the back burner?

Sun, 10/18/2009 - 22:16 | 103034 Rama V
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Oddly, SSE diverges and falls in concert with Asia bourses.

Sun, 10/18/2009 - 23:56 | 103083 defender
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Strange how there is a sudden pick up in treasury purchases at the exact same point that there is a drop in agencies in that first graph.  Seems that the treasuries for agencies program is working quite well.

Mon, 10/19/2009 - 10:30 | 103269 Anonymous
Anonymous's picture

Look at this and you see that UK, Japan and Hong Kong are the only ones with significant increases. The others are flat.

Hong Kong has a dollar peg. If people see the dollar weakening they go to HK$ hoping the peg will be adjusted upward. The Central Bank sells HK and buys $s at the peg. So they get a flood of dollars. They invest this in only Short Term stuff. This is hot money. It will leave when the pressure is off. (a revaluation of HK$)

Japan has the same problem. This is about currency management and not an investment in the US.

UK has dollar liquidity from the Fed. (swap lines) This is showing up as increased holdings. But it is a wash and will be reversed to normal levels.

Net net there is no increase. How are we going to sell $1T a year for the next decade? I don't get it.

Mon, 10/19/2009 - 11:06 | 103321 Anonymous
Anonymous's picture

Great job, gents, combining the long-term data with the short-term data.

Nice clear analysis, without the Brad Setzer/CFR apologia; thanks!

Mon, 10/19/2009 - 16:18 | 103707 Anonymous
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Please continue with these type of tic posts, ever since brad setser quit blogging I can't find where else for the china and tic analysis.

Tue, 10/20/2009 - 12:25 | 104434 Anonymous
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I don't mean to discount the outrageousness of the Fed's treasury purchasing, but a major reason Chinese treasury purchases are down is that they have fewer dollars available from the shrinking trade imbalance with the US to buy them with.

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