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China Sold Second-Largest Amount Ever Of US Treasurys In December: And Guess Who Comes To The Rescue

Tyler Durden's picture




 

While we will have more to say about the disastrous December TIC data shortly, which was released early today, and which showed a dramatic plunge in foreign purchases of US securities in December - the month when the S&P soared to all time highs and when everyone was panicking about the 3% barrier in the 10 Year being breached and resulting in a selloff in Tsy paper - one thing stands out. The chart below shows holdings of Chinese Treasurys (pending revision of course, as the Treasury department is quite fond of ajdusting this data series with annual regularity): in a nutshell, Chinese Treasury holdings plunged by the most in two years, after China offloaded some $48 billion in paper, bringing its total to only $1268.9 billion, down from $1316.7 billion, and back to a level last seen in March 2013! 

 

This was the second largest dump by China in history with the sole exception of December 2011.

 

That this happened at a time when Chinese FX reserves soared to all time highs, and when China had gobs of spare cash lying around and not investing in US paper should be quite troubling to anyone who follows the nuanced game theory between the US and its largest external creditor, and the signals China sends to the world when it comes to its confidence in the US.

Yet what was truly surprising is that despite the plunge in Chinese holdings, and Japanese holdings which also dropped by $4 billion in December, is that total foreign holdings of US Treasurys increased in December, from $5716.9 billion to 5794.9 billion.

Why? Because of this country. Guess which one it is without looking at legend.

 

That's right: at a time when America's two largest foreign creditors, China and Japan, went on a buyers strike, the entity that came to the US rescue was Belgium, which as most know is simply another name for... Europe: the continent that has just a modest amount of its own excess debt to worry about. One wonders what favors were (and are) being exchanged behind the scenes in order to preserve the semblance that "all is well"?

 

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Tue, 02/18/2014 - 14:19 | 4448900 forwardho
forwardho's picture

RELEASE THE KRACKEN!!!

Tue, 02/18/2014 - 13:01 | 4448515 New American Re...
New American Revolution's picture

The bought the U.S. Bonds with money the FED gave them to buy them.   Taper?  Hardly.  In name only.

Tue, 02/18/2014 - 13:35 | 4448681 Chuck Knoblauch
Chuck Knoblauch's picture

A royal flush of worthless US dollars does not impress me anymore.

Tue, 02/18/2014 - 13:08 | 4448551 steveo77
steveo77's picture

We had an Asteroid whiz by Monday and on Sunday I predicted a big earthquake, and we got a 6.5 in the caribbean.

After some cross country skiing with the dogs (ski-journing) I will have to work on that grand unification theory that ties in gravitation, electric, magnetic….and the missing factor…

Post here
http://nukeprofessional.blogspot.com/2014/02/asteroid-fly-by-today-february-17th-and.html

Tue, 02/18/2014 - 13:14 | 4448574 kchrisc
kchrisc's picture

The new board game of "Hot Potato" called "Bond Potato." The one holding the most UST bonds and less gold when the "dollar clock" stops loses. A twist in the game is that players must also scramble to get "physical" gold, as not all that glitters is gold but tungsten.

Tue, 02/18/2014 - 13:32 | 4448667 Chuck Knoblauch
Chuck Knoblauch's picture

don't worry, be happy - a brave new world is on its way!

Tue, 02/18/2014 - 13:22 | 4448608 Bastiat
Bastiat's picture

USDX losing fingernails hanging onto 80.00.

Tue, 02/18/2014 - 13:34 | 4448676 Oldwood
Oldwood's picture

When the shit storm finally does hit, it will be the most predicted yet least understood disaster in history. While we may know the root causes, they have managed to create such a convoluted and complex fucked up mess trying to keep this thing afloat, there will be special schools built simply to study it. Sadly it is all deliberately complex simply for the same reason as the income tax code is so, so no one will be able to figure it out, so chaos will prevent the eye from seeing with any clarity what we face. No one will have been able to see this coming, even as it consumes us.

Wed, 02/19/2014 - 04:30 | 4451695 Groin
Groin's picture

All good except for the school to study it, that requires a suplus to pay the academics and that won't be available.

Tue, 02/18/2014 - 13:38 | 4448699 SharkBit
SharkBit's picture

Holy Shit Batman! All is Well.

Tue, 02/18/2014 - 13:41 | 4448716 Rising Sun
Rising Sun's picture

USD goes down, Euro goes up. 

 

How many insolvent countries in Europe currently?

Tue, 02/18/2014 - 14:07 | 4448829 Chuck Knoblauch
Chuck Knoblauch's picture

EUROPE NEEDS MORE INFLATION!

 

THANKS FOR NOTHIN.

Tue, 02/18/2014 - 13:45 | 4448739 Save_America1st
Save_America1st's picture

And they promptly converted it into further stockpils of phyzz gold...probabaly phyzz silver too, who knows? 

Has anyone been able to keep track of any large purchases/shipments worldwide of phyzz silver like they've been able to track with phyzz gold?

I think if we ever get good reports on where the phyzz silver has been going it's going to create the mother of all silver runs.  People just don't have a clue of the phyzz fundos for real silver.

Has anyone seen this 3X Bull silver ETF yet?  USLV

Whoa baby, is that one going to go crazy when the silver rocket leaves the launch pad!!! 

 

Tue, 02/18/2014 - 14:05 | 4448822 Chuck Knoblauch
Chuck Knoblauch's picture

You make it sound like gold and silver grows on special trees that grow in Belgium.

Tue, 02/18/2014 - 14:13 | 4448832 silverserfer
silverserfer's picture

don't do it its a trap SA1. If you want to gamble go bet 5k on black and be done.

The $ you put into  ETF's is used to bet aginst you. Ur shooting yourself in the foot by buying into the deriviatives.

Tue, 02/18/2014 - 13:46 | 4448742 Apeman
Apeman's picture

Belgians = useful idiots

Tue, 02/18/2014 - 13:58 | 4448792 EastCoast90
EastCoast90's picture

Tell them to send their finest Belgian waffles and hold the syrup.

Tue, 02/18/2014 - 14:03 | 4448805 Chuck Knoblauch
Chuck Knoblauch's picture

Operation Masterbation is in full swing! Excellent job Janet "non-gentile" Yellen!

Tue, 02/18/2014 - 14:14 | 4448863 RobinHood73
RobinHood73's picture

This has got to be the most bearish news I have heard thus far.The Ponzi is dying right here,right now....

Tue, 02/18/2014 - 14:16 | 4448877 BadDog
BadDog's picture

MyRA = war bonds

Tue, 02/18/2014 - 14:23 | 4448927 Lionhearted
Lionhearted's picture

Any idea what they bought with their sale of FIAT JUNK paper? Gold and Silver maybe? Or where they geinuses like bonestar and invested it in 2bitcoins?

Tue, 02/18/2014 - 14:24 | 4448932 Randoom Thought
Randoom Thought's picture

So what is the problem? They will use the debt as collateral to issue more of its own debt. Life is good.

Tue, 02/18/2014 - 14:29 | 4448956 kenezen
kenezen's picture

It's a treasury play. The question is only what offset is sitting in the treasuries portfolio. Out of the money CDS swaps on Euros?  Perhaps TruPS?

The fact is they can't continue offestts if Japan and China starts selling serious amounts. Perhaps that's why Bermuda is seeing BIG renewed interest from the hedge Funds?

Tue, 02/18/2014 - 14:41 | 4448996 I Write Code
I Write Code's picture

They needed the cash to buy bitcoins.

Tue, 02/18/2014 - 14:45 | 4449021 bankonzhongguo
bankonzhongguo's picture

In terms of pure politics, it would be delightful if China would simply lower its dollar holdings by the same amount as the monthly Fed QE operations - say $55 billion/month.

That would send an big message, but also call a spade a spade.

At some point all those CPS big brains will have to rally around some kind of nationalist agenda which points a sharp stick at GS and JPM and their ruin of international financial stability.

Now, to be fair, China, Inc can and does kick the can down the road in building its sky scrapers, bullet trains and ghost cities, but they are a single party system.  They can keep those loans on the books just like their Japanese progeny.

Better for China to convert UST into physical gold housed in Beijing.

Tue, 02/18/2014 - 15:42 | 4449273 Fix-ItSilly
Fix-ItSilly's picture

It doesn't send much of a message if the lower Treasury holding of the Chinese is only because of a swap into euro denominated sovereign bonds.

If it was to hold oil, precious metals or to buy AAPL...  that would be a true reserve exchange out of Western fiat.

Tue, 02/18/2014 - 15:06 | 4449118 Pareto
Pareto's picture

side bar:

 

anybody notice how the $TRIN is sporting a 1.53 (which by any historical non interfering measure) should be indicating a bear ugly day - a screaming sell - ass kicking - behind the woodshed beating.  Especially coupled with the $VIX.  These indicators use to mean something.  They sure don't anymore.  Shinannigans!!  And everytime I see this, it seems to me that it can only mean the FED is increasingly adding to its position to the stock market - just as it has to the Bond market - that the FED is going to mop up bonds to keep yields suppressed, and mop up stocks to keep prices from tumbling.

 

Just another POMO day I suppose.

Tue, 02/18/2014 - 15:28 | 4449214 Bunga Bunga
Bunga Bunga's picture

Don't worry, it is just the Chinese government members and oligarchs parking their money in Belgium.

Tue, 02/18/2014 - 15:31 | 4449222 yogibear
yogibear's picture

Central banks of the world will play debt ping-pong.

I buy your debt, if you'll buy mine.

One huge debt circle-jerk. 

Tue, 02/18/2014 - 15:31 | 4449223 yogibear
yogibear's picture

Central banks of the world will play debt ping-pong.

I buy your debt, if you'll buy mine.

One huge debt circle-jerk. 

Tue, 02/18/2014 - 16:14 | 4449415 supermaxedout
supermaxedout's picture

And the final teams of this ping-pong championship are:  The Fed and the BOE.  The pound is still a well trusted money, look how many foreiign buyers of UK Guilts. Isn't it ?  And Dollar too, look how many US treasuries are still sold abroad, many, many to the UK. 

But now its seems, that there is a limit reached endangering the BOE.  But no problem, Nato in Brussels as the boss of EU Commissions President Barosso made it possible. Somehow, the tiny Nationale Bank van België is now capable and willing  to purchase huge amounts of suddenly offered US treasuries. The sellers did not want or need these treasuries in their portfolios anymore.  The Chinese do still have a Trillion, isn't it ?  The money the tiny Nationale Bank van België needed for the purchase was just, just  freshly printed from the new Fed print master lady and found somehow miracously its way to Brussels. Huh, that means trouble. When the US needs alredy such cheap and obvious tricks, then the end is maybe not anymore far.

Tue, 02/18/2014 - 17:11 | 4449682 Haager
Haager's picture

What a hell of an effort to keep money printing  hidden before the eyes of the dumb and stupid peasants. Makes me just ask: Why? Most of them wouldn't care if it would happen before their noses.

Tue, 02/18/2014 - 15:39 | 4449258 Fix-ItSilly
Fix-ItSilly's picture

So China flips USD$ Treasurys for Euro bond debt.  Big deal.

How else will the Western countries allow China to diversify their reserve holdings?  The Fed and ECB don't want Yuan.  The US and Euro Govts don't want their companies and resources to be purchased.  So China flips some Treasurys to the ECB.  Again... big deal.

Tue, 02/18/2014 - 15:46 | 4449290 A82EBA
A82EBA's picture

Belgium..Another correct forecast from Jim Willie's Hat Trick Letter (last month)

Tue, 02/18/2014 - 15:48 | 4449294 Mr Giggles
Mr Giggles's picture

This is just parce the parcel with many layers, this will not end untill

a merchant has the balls and says thats it no more free energy and

the prize is revealed to be a stinky dog turd (long gloves very long gloves.)

Tue, 02/18/2014 - 16:03 | 4449355 resurger
resurger's picture

Dump that shit!

Tue, 02/18/2014 - 16:06 | 4449365 GrinandBearit
GrinandBearit's picture

Just a house of cards waiting to collapse.

When a strong wind comes along... down it goes.

 

Tue, 02/18/2014 - 16:13 | 4449404 Took Red Pill
Took Red Pill's picture

Wait! Didn't the Fed give money to EU banks? All smoke & mirrors!

Tue, 02/18/2014 - 16:13 | 4449408 yogibear
yogibear's picture

Nonsense with the Fed's balance sheet. How much drops off into off balance sheet.

The Fed is just like their member banks, fantasy accounting.

How much gold does the Federal Reserve have?

Tue, 02/18/2014 - 16:17 | 4449429 Chuck Knoblauch
Chuck Knoblauch's picture

The economy is built on faith in magic.

Tue, 02/18/2014 - 16:47 | 4449571 Tenshin Headache
Tenshin Headache's picture

Fantasy accounting, and they never get audited. Sweet.

Tue, 02/18/2014 - 16:35 | 4449513 Chuck Knoblauch
Chuck Knoblauch's picture

China doesn't like the USD$ anymore. What ramifications does this have for the currency if Belgium doesn't continue acquiring US Treasuries, and China keeps selling? This article suck because it doesn't tell you who bought and sold the debt. We have to assume that it was some kind of swap? Bullshit!

Tue, 02/18/2014 - 16:40 | 4449539 vincent
vincent's picture

Collateral?

Tue, 02/18/2014 - 16:49 | 4449575 optimator
optimator's picture

Who bought them?  The EU, with money wired from the Fed.  

Tue, 02/18/2014 - 19:31 | 4450233 bluskyes
bluskyes's picture

But, how much did they have to pay?

Tue, 02/18/2014 - 16:51 | 4449583 earleflorida
earleflorida's picture
That's about 3% less business china has in store for ussa in 2014... redemption, could now become a not so distant, 'death by a thousand cuts'!?!
Tue, 02/18/2014 - 16:54 | 4449607 Motorhead
Motorhead's picture

This is another story getting old, usually put out by the Jim Sinclairs, et al, of the world.  No mention of the hefty rise in 2012-2013.

Tue, 02/18/2014 - 17:29 | 4449767 rsnoble
rsnoble's picture

Hot Potato.  Or in this case hot garbage.

Tue, 02/18/2014 - 18:02 | 4449915 earleflorida
earleflorida's picture

you've got hot potatos all over the globe-- growing, glowing, hot steamy diversion eyeballs(?), ripe for plucking?!?  such as: venezuela, argentina, cuba, kiev, turkey, pakaf, syria, sudan, ethiopia, libya, tehran, qatar, riyadh, egypt, iraq, bangkok, burma, dhaka, etel!

russia will side with china, or china will side with russia and throw profit yeilding sanctions to the western winds? the ussa will garner britain, france(?) and what's left of the broken EU support, and of course the hopeless/broke  Jap's!!!  (India is just a non-factor-- so corrupt, it died in 1947?)

Tue, 02/18/2014 - 17:54 | 4449876 Cornholiovanderbilt
Cornholiovanderbilt's picture

Praise the Lord for Mark to Unicorn Accounting!

Tue, 02/18/2014 - 18:10 | 4449952 css1971
css1971's picture

Is it just me or does this look like desperation?

Tue, 02/18/2014 - 18:17 | 4449977 chump666
chump666's picture

Also the Fed, long behold, is protecting the USD/DXY from collapse.  If anyone has been keeping up on current events, China has been diversifying out of US denominated assets big time and buying gold.  Prelude to war.

 

Tue, 02/18/2014 - 18:21 | 4449989 devo
devo's picture

*Insert "these will not buy many waffles" joke*

Tue, 02/18/2014 - 18:23 | 4450002 are we there yet
are we there yet's picture

Maby the Chinese really really really really like Belgum chocolate.

Tue, 02/18/2014 - 18:25 | 4450010 Debt Slave
Debt Slave's picture

Which asshole said "Deficits don't matter."? Oh yes the vastly intelligent and omniscient Dick 'nukes in Iraq' Cheney. Yet when this louse makes an appearance on FOX, everyone bows and scrapes like he is some kind of a messiah. Then the Foxies get mad when you call them "conservatards".

If I were China, I'd be dumping as much as I could without making waves. At least they are shrewd enough to know that.

Full faith and credit of the United States, a war mongering, over taxed, over spending, over indebted, and over medicated nation of media mind controlled ding dongs. Yeah. It's gonna slam into a brick wall, and only one in ten thousand is going to see it coming.

Tue, 02/18/2014 - 19:04 | 4450135 goldhedge
goldhedge's picture

105,000 + reads. 

Are the sheeple waking up?

Tue, 02/18/2014 - 19:05 | 4450140 fuu
fuu's picture

It was cross posted to Drudge.

Tue, 02/18/2014 - 19:10 | 4450152 Chuck Knoblauch
Chuck Knoblauch's picture

William Wallace would like his freedom, or a refund!

Tue, 02/18/2014 - 19:07 | 4450147 mobydick
mobydick's picture

This is why Obummer is going to force you to invest your 401k in Treasuries

Tue, 02/18/2014 - 19:19 | 4450181 Chuck Knoblauch
Chuck Knoblauch's picture

They may take our lives, but they can never take our freedom!

 

http://www.youtube.com/watch?v=0zFAvzf0Mv0

Tue, 02/18/2014 - 19:20 | 4450187 jonjon831983
jonjon831983's picture

Wow, serious? 106,415 reads?

Wed, 02/19/2014 - 01:52 | 4451560 The Wedge
The Wedge's picture

It's on Drudge. I think or it was. No better way to hammer your servers.

Tue, 02/18/2014 - 19:52 | 4450321 Ungaro
Ungaro's picture

US & EU Central Bankers' Mutually Assured Distruction Pact: I'll buy yours if you buy mine. The net effect? Improved credit rating. See how much demand there is for our debt? 

Tue, 02/18/2014 - 20:02 | 4450353 Chuck Knoblauch
Chuck Knoblauch's picture

US & EU stroking each other off in the corner for a little debt relief. Trickle down coming soon! Central bankers are watching too much porn. Cigarette, anyone?

 

http://www.youtube.com/watch?v=gb2zIR2rvRQ

Wed, 02/19/2014 - 03:21 | 4450468 satoshi411
satoshi411's picture

It's all FED money, remember back in 2008 FED had trillions in back door off the book money being send to rescue europe, aka buy bad US debt.

That back-door is still open, FED sends FRN to EUROPE, and EUROPE buys US-DEBT with FRN.

Remember they said "TAPER",

"I told you that the FED would quit buying US-DEBT directly, I never said that the FED would quit buying US-DEBT indirectly." - The Joker

Tue, 02/18/2014 - 21:47 | 4450753 Mediocritas
Mediocritas's picture

When a country runs a current account deficit then a domestic deflationary pressure is produced which, if left unchecked (as it should be), will cause the deficit to self-correct (made more difficult in a world of floating currencies). Seeing as this is not in the interests of trading partners, these nations prefer to recycle their surpluses back into the source nation (usually as sovereign debt purchases), thereby ensuring a continual trade imbalance can be sustained in the favor of exporters. 

Should the US trade deficit (with any given nation) narrow or, through some miracle, move to surplus then the trading partner can simply cut back on US bond purchases, or let existing holdings run-off, to counteract the shift and create economic headwinds for the USA. This can continue until bond holdings and foreign currency reserve holdings have been exhausted.

Although the US-China trade deficit narrowed quite substantially at the end of 2013, this is chicken feed compared to the size of the reduction in Chinese TSY holdings, so wanting to create headwinds for the US economy is unlikely to be the primary motivation behind the decline.

As noted by the article, the US is still running a hefty deficit with China meaning that the USDs are still flowing to China. If fewer of these USDs are being recycled back into USTs, then where are they going and why?

The "where" is easy enough to see, as evidenced by the buildup of reserves. The "why" is (in my opinion) not because of a fear of the USA blowing up. If it were, then China would be seeking to divest itself of all US dollars and dollar equivalents for fear of devaluation. I believe it is more likely to be due to instability in the Chinese eurodollar system.

People often forget that there are not one, but four USD denominated fractional reserve systems in the world. The domestic US system and the foreign eurodollar system, then the shadow equivalents of both. US traditional domestic is the one that receives the most attention in the media even though it's not the largest. (Incidentally, this is the main reason I read ZH, because it's one of the few sites that pays attention to the other 3 systems, the elephant in the room).

The Fed, as the overseer of all four systems (although it didn't seem to realize it had to oversee the shadow systems until 2008), must conduct activities in all four, yet the media only ever seems to hold it accountable for the consequences of its actions in the traditional domestic system with slowly increasing appreciation of the effect of actions in the domestic shadow system. For this reason, pundits scratch their heads wondering how things like QE2 were intended to help the domestic economy. This was never the intent. QE2 was a bailout for the eurodollar system (as ZH was one of the few to notice).

So when China cuts TSY holdings without an equivalent cut in the US-China trade deficit to justify it, and Chinese USD holdings pile up inside China then the question is not "what's wrong with America?", the question is "what's wrong with China?".

TL;DR: The Chinese eurodollar system is building reserves in anticipation of Chinese defaults (primarily from the China domiciled shadow eurodollar system). Europe is buffering the side-effect. Deflation is about to bite (and Soros knows it).

 

Wed, 02/19/2014 - 01:55 | 4451567 IridiumRebel
IridiumRebel's picture

+1 excellent post

Wed, 02/19/2014 - 03:42 | 4451659 satoshi411
satoshi411's picture

One only need ASK who is 'AAA', and WHO is the FED not  supporting with FIAT to infinite?

NOK, SGD, CHF

Are 'AAA' paper, like GOLD

 

EURO, JPY, CNY, USD are all on triage, and the FED supports all.

Where should you keep your money safe? In 'AAA' paper.

*

I wouldn't be surprised if the FED was supporting RUSSIA? Why not we're support China.

Who are we not supporting? Malaysia, Iran, North Korea,.. the list is short, personally we probably are supporting Iran.

It would be just like the USA to embargo IRAN, but support their currency, and ability to borrow from the IMF.

*

That's another way to PUT it, if you as a member nation suck cock at the IMF pig trough then you are kept alive with FED FIAT.

A moron might ask, but "WAIT isn't the FED a USA agency?",... nope the AIPAC make the FED an INTERNATIONAL pyramidal printing agency back in the 1970's, thank you Kissinger.

 

Tue, 02/18/2014 - 21:33 | 4450797 Tabarnaque
Tabarnaque's picture

So we learned that Foreign ownership of US treasuries has reached an all time high in December. In that month foreign nations were net buyers of Treasuries to the tune of $78 billons. This was in a month when the Federal Reserve was still buying $45 billons/month of US Treasuries. That makes for a combined total of $123 billons of US Treasuries.

 

However, I read somewhere that the US government ran a $50 billons budget surplus in December.  

 

So how can those figures make sense? Does it mean that US banks sold to foreigners and the Fed US Treasuries to the tune of $123 billons in December alone? I have a hard time believing that. December is the month when the Federal Reserve told the world that they were moving forward with their planed tapering.

 

So yeah right! Foreigners jumped in to massively buy US Treasuries from US banks when the buyer of last resort told the world that they were leaving the party??!! Sorry, I don’t buy that.

 

Then, just to put things in perspective, all this happened at the same time that EM were net sellers of US dollars as they tried to defend their falling currencies as hard as they could.  

 

It looks to me that it is getting increasingly difficult for the power that be to keep putting lipstick on the same old rotten pig. Their lies are now getting so out of proportions that no matter how much lipstick they apply, their rotten pig in increasingly visible.

Tue, 02/18/2014 - 22:16 | 4451021 Ned Zeppelin
Ned Zeppelin's picture

Its obvious. China is "tapering" its holdings of Treasuries.

Tue, 02/18/2014 - 22:31 | 4451061 Johnny Cocknballs
Johnny Cocknballs's picture

Sure, the economic doom porn stuff now has the perceived weakness of having cried wolf for 5 years or so - but the fact that this sell by the Chinese had to be offset by such an obviously fake backdoor Fed buy through Belgium (ever been In Bruges?)...fucking Belgium... should give everyone some pause.

Expect more of the same. Even if the dollar has more life in it/least worst fiat than the average ZHers tends to think, this doesn't mean the Chinese want to live in the status quo.  In fact, much of the world is eager to get away from the dollar, and that has been happening - regardless of whether TPTB can get a private central bank and IMF bondage going in Syria. 

Bitcoin is likely, in part, a hedge against dollar erosion by intelligence agencies and their associated money launderers and arms dealers - a hedge in terms of value and traceability.

However, has anyone actually looked at "who" is so clearly running the Treasury Department - from the Treasurer, to the Deputy, to the Undersecs, to several of the more important departments which have to do with foreign asset control and money laundering?  As with the State department, which shows similar disproportionate representation of a certain group - these are neocon and crypto neocon "deep state" people, and they probably only care about the ability to the US to project military and black ops power in order to "remake" the ME, and certainly yearn for a war on Iran for reasons having little to do with the bullshit cover story.

 

Anyway, China no doubt knows that the dollar is nearing the end of its lifecycle, and is being propped up via export of inflation, the petrodollar, and most of all, the sine qua non, the US military. It's inarguable that the dollar continues to lose purchasing power, which is why they're buying gold. It's inarguable that US and EU growth is premised on debt, not stronger fundamentals, which is why they, too, have decided to build airports and roads and dams and put it on the credit card too {no sense financing the rest of the world's debt-based growth}.  But it also wants to have the yuan be as reserve as the dollar in East and South Asia, and apart from buying less fed debt, and selling some, I'd expect their buying spree in the US to markedly accelerate...

By buying US assets, it not only trades deteriorating fiat for real assets, it helps send a lot of dollars back into the US economy, which, in the short and perhaps midterm will help prop up the massive trade deficits China enjoys...{ie they'll ultimately get a lot of anything they spend back - which creates more reason, given the above, to sell even more treasuries}

 

Anyway, take or leave the above.  But seriously - Belgium?  Who's buying it?

Wed, 02/19/2014 - 00:05 | 4451382 Eahudimac
Eahudimac's picture

I agree. China is buying up all of the gold, as many suspect, to back up a new real asset backed currency. Why not milk fiat for all that it is [not] worth? They have nothing to lose by doing what they are doing. The FED and the US government have everyting to lose. The US dollar might as well be backed by Bernake's, now Yellen's, shit stained panties. 

Wed, 02/19/2014 - 09:08 | 4451952 satoshi411
satoshi411's picture

 Maybe 'Belgium' is the only 'friend' that AIPAC has left in Europe, you know this is after the USA said "FUCK EUROPE"

Belgium, aka EU has its own problems, and getting FED-FIAT is a good thing,

But at this late point in the game just about everybody including UKRAINE is looking for a lifeboat, and uncle-sam's buttocks are not exacly where you to grab a lifesaver.

Tue, 02/18/2014 - 23:11 | 4451196 Yes_Questions
Yes_Questions's picture

 

 

Favour my ass.  BeNeLux owns the FED and won't have no Asian lack of confidence round hiah!

 

Now the debt service payments harvested from US wage earners can finally be a little moar transparent.

 

What's the vig on this anyway? Be good to see this itemized on my fucking W2.

Wed, 02/19/2014 - 01:50 | 4451553 A Dollar Short
A Dollar Short's picture

The Complete Ponzi Circle Jerk.

 

YOU bought your own Bonds by funding the EU with the American Fed tax dollars to bail out China's dumping of our money.

A complete ponzi circle jerk.
Now, we're several dollars short..
Wed, 02/19/2014 - 03:00 | 4451616 DIgnified
DIgnified's picture

EU can-kicks to myRA, who has no feet. 

Wed, 02/19/2014 - 03:01 | 4451619 Dre4dwolf
Dre4dwolf's picture

What happens when China lacks liquidity and they begin to sell gold?

Wed, 02/19/2014 - 03:15 | 4451637 Villageidiot777
Villageidiot777's picture

When China starts selling gold, we have survived the greatest reset. I'm hoping for reneissance, but chinese won't be inventing anything new so we live in stagnation for few hundred years.

Wed, 02/19/2014 - 03:19 | 4451638 satoshi411
satoshi411's picture

BITCOIN - Fonestar  Call Home ...

#1) The bitcoin infrastructure cannot handle a selloff. Once the rush for the exits gains momentum, you will not be able to get out. Only those who sell early will be able to exit the market.
 
#2) The bitcoin infrastructure is subject to the whims of just one person running MTGox who can arbitrarily decide to shut it down whenever he thinks the market needs a "cooling period." This is nearly equivalent to a financial dictatorship where one person calls the shots.
 
#3) Every piece of bad news will be "spun" by exchanges like MTGox into good-sounding news. As bitcoin was crashing yesterday by 60% in value in mere hours, MTGox announced it was a "victim of our own success!" So while bitcoin holders watched $1 billion in market valuation evaporate, MTGox called it a success. Gee, then what would you call it when bitcoin loses 99%? A "raging" success?
#2 Gold

Guys if you are new to this market dont believe the hype. These are just digits, there are lots of digits out there. How many digits are there? YAYa I know there are only so many of these digits but LTC, PPC, NMC, you can use all of these digits to get those digits.

 

uhmmmm Ukraine has just one guy running all the BTC mining worldwide, and MT-GOX has just one guy controlling all the exits world-wide, .. yep P2P my ass. Peer to Asshole would be more apt explanation of BTC.

Wed, 02/19/2014 - 03:21 | 4451641 limit_less
limit_less's picture

Did anyone guess it was Belgium?

Wed, 02/19/2014 - 03:31 | 4451647 satoshi411
satoshi411's picture

I have to admit, my first guess it was the FED themselves.

Here's the deal we don't know the truth.

We we do know is that in the last month the FED spent billions buying BAD JPM & GS debt from CHINA, so that chinese-momma's don't pull out all together out of the paper market in CHINA.

The truth, IMHO is that the FED has been giving FIAT all along to everybody Africa, Asia, South-America, ... and Europe.

That they would tell us that "Belgium" is the buyer is suspcious, but we do know there is only ONE buyer on PLANET earth than can print FIAT to infinite and make everyone GOOD, during the collapse of US Paper Assets.

If the USA was NOT to do then all USA paper would be sold.

Think of MT-GOX right now, its like CYRPUS, total fucking  shutdown nobody can get real money back, but if you shutup and go away, MT-GOX can create infinite BTC for you to shutup.

How long can MT-GOX cover their ponzi with FREE BTC? Probably forever.

How long can the USA prop up worthless wall-street paper assets by covering bad bets with FED FIAT? Probably forever. Will some thing give? Probably not.

Only when people start getting hurt does shit happen. Right now the FED just keeps bailing every body out in secret, the off BUDGET now must be in the 100's of TRILLIONS, but who the fuck cares, it will never be paid back, its all accounting fraud.

*

Once the CHINESE have unloaded all the toxic US paper, and then once the CHINESE & RUSSIANS refuse to accept FED-FIAT, ... then the SHIT will hit the fan.

Right now the Chinese/Russians can take FED-FIAT and BUY GOLD, ... how long will this last? Until the fat woman sings.

Wed, 02/19/2014 - 06:43 | 4451760 BeetleBailey
BeetleBailey's picture

I guessed George Soros...but I also polished off a 1.75 of Jack Daniels...so that might cloud my judgement a tad....

Wed, 02/19/2014 - 03:52 | 4451669 Ranger19
Ranger19's picture

Those Fed Notes were easier to get rid of before they started printing them on fly paper.

Wed, 02/19/2014 - 05:20 | 4451721 Typing Typer
Typing Typer's picture

Good, I hope China sells all our paper. Then we no longer have to listen to their childish threats.

Wed, 02/19/2014 - 05:24 | 4451723 belgtrader
belgtrader's picture

As a belgian citizen I am completely stupified by this. Our GDP is around $500bn and we've got over 100% of that in debt. I really don't see where we would get that money from. Budgets are extremely tight and usually they are bickering about finding a couple of billion to not have an insane deficit.

Then again we have a Gay Italian guy with a red bow-tie as a prime minister so nothing really surprises me anymore.

P.S. I'm stacking gold bars with a center of Belgian Chocolates. When shit hits the fan I'll first sell the gold and then eat the chocolate for instant happiness.

Wed, 02/19/2014 - 07:08 | 4451725 smacker
smacker's picture

I'm not sure that "Belguim is simply another name for Europe" as Tyler claims. Maybe the Belguim central bank is a marionette of the EU puppet masters.

Nevertheless, this is a strange series of events.

But at USD48 billion per month, it will take China another 26 months to sell off its warehouses of US Treasuries and there'd be a collapse in the market long before that happened, or they could sell them off over a very long period to avoid scaring the horses. It may just have been a signal from China to the US Fed that we can sell your paper as well as buy it.

More data needed on this.

Wed, 02/19/2014 - 06:19 | 4451750 Mi Naem
Mi Naem's picture

This thread is, as of the writing of this post, about 9 hours old, and is the most recent thread.  How could this be? 

Somebody put a hit on the Tylers? 

Tylers took too many hits? 

Wed, 02/19/2014 - 06:24 | 4451754 XAU XAG
XAU XAG's picture

Belguim is simply another name for Europe

 

Europe stocking up on $ dumping euros before a war..........same as it ever was


Wed, 02/19/2014 - 06:25 | 4451755 GFORCE
GFORCE's picture

$48 is chicken feed in regards to China's holdings. China and Russia will scale back on treasuries, while europe will increase their holdings to net any shortfall.

Nothing to see here.

Wed, 02/19/2014 - 06:33 | 4451757 satoshi411
satoshi411's picture
Internet Trolls Really Are Horrible People Narcissistic, Machiavellian, psychopathic, and sadistic. Science Confirms: Internet Trolls Really Are Narcissistic, Psychopathic, and ... *
Fuck what does this say about our Indian Call Center bot's working 24/7 for google clicks?
http://www.slate.com/articles/health_and_science/climate_desk/2014/02/in...
Wed, 02/19/2014 - 07:13 | 4451782 Ketsa
Ketsa's picture

"only $1268.9 billion" ...

Wed, 02/19/2014 - 07:35 | 4451801 AdvancingTime
AdvancingTime's picture

This supports my acticle that delves into the games central bankers are playing in supporting their and other currencies has reached a dangerous level, we may be in the "red zone". Currencies are important chips in the commerce of government and the business of running a country.

History has shown that in the past both leaders and governments have fallen with the demise of their coin. This area of finance has become the worlds largest casino, where players have the potential to quickly suffer staggering losses. More details in the article below,

http://brucewilds.blogspot.com/2013/01/currencies-games-in-danger-zone.html

Wed, 02/19/2014 - 07:34 | 4451805 Apostate2
Apostate2's picture

China has now restricted foreign economists from opining or participating in advisory roles on the Chinese economy (unless pre-approved 'friends' of China}. Not that these so-called experts have anything to contribute, but that is another narrative. However the impetus to this action is due to the CCP central financial planners who do not want contrary opinions nor evidence to sully their record of everything is OK, move on.  

There is no better evidence that things are getting very dicey in the PRC. Expect the worse but hope for a reprieve. 

Wed, 02/19/2014 - 08:52 | 4451910 satoshi411
satoshi411's picture

CHINA looks at Japan, and see's where following the advice of USA 'experts' takes you, aka AIPAC... It takes you to Hell. Since WWII Japan has been the USA bitch vis-a-vis AIPAC, and now JAPAN is fucked.

Think CHINA wants to be JAP-FUCKED(tm), ... NO ... HELL NO.

So CHINA tell's all USA aka experts aka GOLDMAN-SACKS, and JPM to "FUCK OFF",

And you fuckheads see this as a negative,... this my friends is a BUY signal.

Wed, 02/19/2014 - 09:14 | 4451963 Apostate2
Apostate2's picture

As expected you miss the point. China is not worried about dodgy advice, they do not want the economic data to be exposed which will happen if non-approved 'friends of China' are given access to state stats.

You have, again, proven your lack of understanding of what the real issues are. China has expert economists but freedom to deploy that expertise is subjugated to the political imperatives. The Japanese or western banks are not the issue. What is an issue is your obtuse and dissembling attempt to mislead and/or appeal to the ignorant who think that saying 'fuck this' or 'fuck that' is a substitute for reality and substantive analysis.

Take a hike.

Wed, 02/19/2014 - 08:01 | 4451827 Sufiy
Sufiy's picture


Gold Catalyst: U.S. Government Says 'No Inflation' As Food Prices Soar 


Everybody who is living the normal life knows that all food prices are going up every year. So far inflation was exported to emerging markets and places like China with strict management of its currency valuation. Jim Rickards has explained it in the great detail in his book: Currency Wars. Now after The Currency Wars we are entering The Financial Wars. China has already cut its US Treasury holdings most since 2011 and bought the record amount of Gold. Watch Yuan to go higher now.The great inflation episode can be much closer than a lot of people think.Rising velocity of money will push inflation back into the Western system and Gold already smells that it is coming with its recent breakout. http://sufiy.blogspot.co.uk/2014/02/gold-catalyst-us-government-says-no....

Wed, 02/19/2014 - 08:59 | 4451938 Ranger19
Ranger19's picture

Spot on.

Wed, 02/19/2014 - 08:58 | 4451930 Ranger19
Ranger19's picture

Gold, Silver, Lead and Copper.

Wed, 02/19/2014 - 11:16 | 4452488 kw2012
kw2012's picture

Where to get lead now that Obama's EPA has shut down the last US producer of lead.

Wed, 02/19/2014 - 11:28 | 4452532 omi
omi's picture

For both EU and US to survive, they must buy each other's vomit.

Wed, 02/19/2014 - 11:34 | 4452556 omi
omi's picture

For both EU and US to survive, they must buy each other's vomit.

Wed, 02/19/2014 - 12:04 | 4452660 resaci
resaci's picture

Bleeyaahhh offhhh more if you Please,,,

Fri, 02/21/2014 - 14:01 | 4462458 el perro
el perro's picture

belgium: it's not about chocolate or the central bank, but about euroclear which is headquartered in belgium

euroclear holds assets (for customers) of €23 trillion!! 

https://www.euroclear.com/en/about.html

these accounts are included in 'belgium' altough little money is from belgians.

Just like the numers for 'caribbean' are massively inflated.

 

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