trick or treat - quantitative easing recycles government deficits, via tax havens, to fund foreign government deficits

from tic data on foreign holdings of treasury data here http://www.treasury.gov/resource-center/data-chart-center/tic/Pages/fpis.aspx although already a year out of date, enquiring minds might want to study the three and five year changes in foreign holdings of long term treasury debt, compare these with US fiscal deficits...and then do the reverse and compare equivalent data for europe (foreign investors in european government debt). enquiring minds might also want to know how much of this new found wealth to invest in each geographical blocs government debt has come from either the Fed or the ECB. try extracting the data in csv format and sorting it by size of change in the last five years (June 2007 to June 2012) its pretty easy. shows that the euro area (including puppet states like switzerland, roumania and poland) has become a rather large financier of the US deficit. I am betting the same is true going the other way...US "investors" have increased their holdings rather dramatically in euro area sovereign debt in the last five years. they scratch our backs, we scratch theirs...now factor in japan..and you have a third leg to the "lender of last resort" that the central banks are providing their governments as these governments struggle with an ability to govern...full stop. next, check out the tax haven activity..now call me a cynic, but Belgium is not a top candidate for being a country that has discovered a way to make oodles of money...it has no elected government and has one of the highest debt to gdp ratios in the world..up there with italy, but not quite japanesque. perhaps it would be a surprise to note that since the collapse of the worlds financial system in 2007/8 the belgians have found a way to accumulate an extra 120 billion of treasuries...not bad for a nation beggared by the crisis...you might connect a dot or two and end up in brussels, but im sure that is coincidence. look beyond belgium and check out a few other impossibly wealthy caribbean islands..bermuda has managed to grab 50 billion of treasuries...now call me a cynic..but that can only be tax evasion..oops...avoidance..perhaps bermudians should vote to enact the opposite of "odious debt" and engage in "wonderful bouquet assets" and just sequester it..i doubt the 64,237 bermudians will ever have the chance to seize that much money from the modern day pirates operating in their waters....not too shabby..a billion each...the 54,278 on the cayman islands are positively poor in comparison as they have only managed to grab 33 billion in the five years to June 2012...lastly, that hugely rich and independently (other peoples) wealthy "country", luxembourg has managed to come up with 50 billion to lend to the US government...but at least they have 524,000 people to spread that around to... funny how britains one year presidency, or whatever its called, to choke off tax shelters has fizzled out when money appears out of nowhere to fund its ridiculous budget...all is well....not. these four failed or captive countries alone (belgium, bermuda, cayman islands and luxembourg) have found the wherewithal to lend the us government a quarter of a trillion dollars in the three years to June 2012...i mean if they can do it by just catching the crumbs off the QE table..imagine what countries or regions with central banks are up to...when was the last time anyone asked what the size of the swap was at between the ECB and the Fed? (listens carefully.....listens some more). anyway i digress... china has been got rid of the odd 165 billion of treasuries in the year to June 2012, bringing down its 1.3 trillion by a little over 10%, but never fear...japan...the land of the rising debt, picked up 230 billion in the the year to June 2012 and 400 billion in the three years to June 2012, almost half a trillion in the five years to June 2012....not bad for a permanently radiated country running fiscal deficits of 9% of gdp if this graph is to be believed http://www.tradingeconomics.com/japan/government-budget how you may well ask, could a country like japan find the cash to invest in half a trillion in treasuries in the last five years? i think you waggle an accusatory finger at the bank of japans QE policies even before the "raging bear" that goes by the name of Abe has unleashed his slings and arrows of outrageous bullshit.. if you use my definition of the european empire, which includes client countries like switzerland, the scandis and a few of the "liberated" eastern european countries..(23 of them and including belgium that was included in the four centres of tax fraud countries) broke europe has lent the US government chump change of 600 billion in the five years to June 2012 (japan 500 billion), and in the three years to June 2012, europe has lent 500 billion (japan 402 billion)....not bad for bankrupt nations..they dont have the money to do that..the us doesnt have the money...so where has it come from...has to be QE trick or treat!!