Meet The Brand New, And Shocking, Third Largest Foreign Holder Of US Treasurys

Tyler Durden's picture

Something hilarious, and at the same time pathetic, happened earlier today: at precisely 9 am the US Treasury released its delayed Treasury International Capital data (which was supposed to be released yesterday but was delayed because it snowed) which disclosed all the latest foreign Treasury holdings for the month of January. Among the key numbers tracked and disclosed, was that China's official holdings increased from $1.270 trillion to $1.284 trillion, that Japan holdings declined by a tiny $0.2 billion, that UK holdings increased by $7.8 billion to $171 billion, and that holdings of Caribbean Banking Centers, aka hedge funds, declined by $16.7 billion. Here is Reuters with the full data summary (save it before this article is pulled).

So why is it hilarious and pathetic? Because just three short hours later, the Treasury - that organization that has billions of dollars at its budgetary disposal to collate, analyze and disseminate accurate and error-free data - admitted that all the previously reported data was in effect made up!

Of course, it didn't phrase it as such. Instead, what TIC did was release an entire set of January numbers shortly after it had released the "old" numbers, which differed by a small amount but differed across the board - in other words, not a small typo here and there: a wholesale data fudging exercise gone horribly wrong. For example:

  • Instead of a $14 billion increase, China's revised holdings were only $3.5 billion higher.
  • Instead of unchanged, Japan's holdings suddenly mysteriously increased by $19 billion in January.
  • Instead of plunging by $17 billion, the Caribbean Banking Centers were down by a tiny $1 billion.
  • And instead of the previously reported increase of just under $1 billion, the all important Russia was revised to have sold $7 billion, bringing its new total to just $132 billion ahead of the alleged previously reported dump of Fed custody holdings in mid-March.

That this glaring confirmation that all TIC data is made up on the fly, without any real backing, and merely goalseeked is disturbing enough. For what it's worth, the latest TIC data is here. Feel free to peruse it before it is revised again

However, what was perhaps more disturbing than even that was the revelation that as of January, the US has a brand new third largest holder of US Treasurys, one which in the past two months has added over $100 billion in US Treasury paper, bringing its total from $201 billion in November, to $257 billion in December, to a whopping $310 billion at January 31.

The country? Belgium

The same Belgium which at the end of 2013 had a GDP of just over €100 billion, or a little over one-third what its alleged UST holdings are.

And somehow the Treasury expects us to believe that tiny Belgium - the center of the doomed Eurozone which is all too busy running debt ponzi scheme of its own - bought in two months nearly as much US Treasurys as its entire GDP?

Apparently yes. However we are not that naive.

So our question is: just who is Belgium being used as a front for?

Recall that for years, the "UK" line item on TIC data was simply offshore accounts transaction on behalf of China. Of course, since China hasn't added any net US paper holdings in the past year, the UK, and China, are both irrelevant in the grand scheme of things.

But not Belgium. Because with Russia (or someone else) rumored to have sold or otherwise reallocated $100 billion in US Treasurys in March away from the Fed, we wouldn't be surprised if the Belgium total holdings somehow soared to over $400 billion when the March data is revealed some time in May. Courtesy of the excel goalseeking function of course.

Needless to say, this all ignores the initially confirmed fact that all the data presented above is made up gibberish, goalseeked by a bored intern at the Treasury, and whose work got zero error-proofing before its released to the entire world earlier today.

So... just what is going on with this most critical of data sets - official foreign holdings of US paper, and how long before an Edward Snowden emerges from the depths of the US Treasury building and reveals that behind all the data manipulation and unaudited figures was none other than the Fed, whose holdings, far greater than represented, are all that matter, and everything else is merely one grand, theatrical plug?

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Obama_4_Dictator's picture

Isn't the IMF in Belgum. 

SilverIsKing's picture

Do each of these "holders" of TSYs announce within their own countries what they are holding?

Soul Glow's picture

Do the governments of any Nation-State tell the people the truth?

Hell.  No.

They have various media outlets lie to them.

Rubicon's picture

"Isn't the IMF in Belgum."

The I and the M are but not the F

nope-1004's picture

 

 

Ponzi see, ponzi do.

See ponzi run.

Run ponzi, run!

Woof!

Barf.....

BurningFuld's picture

I'm moving to Belgium. They are rich I say rich!

Soul Glow's picture

They're chocolate enthousism is a 10.

Troll Magnet's picture

Fuck this.  I'm going to go buy more gol......................den 80's CDs to dance to.

Yeah.  That's what I meant.

 

fonzannoon's picture

foreigners have been loading up on USTs to a brand new all time record high, and their increases are WAY more than the Fed is tapering, and the ECB is the biggest buyer of them all.

so what else is going on?

Soul Glow's picture

The Fed's Still Buying

Janet Yellen is about to become Fed Chair.  Little is currently known about her.  When her name is googled it won't register until her full name is typed.  If polled I doubt 2 in 100 people would know who she is.  Yet Janet Yellen is about to become the most important banker in the United States of America.

Yellen is soon to be the great banker of the Federal Reserve, a round table of major banking houses mostly held corporate by US personhood.  Yellen has admitted responsibility for a ship that is sailing right.  Thus the onus is on her.  

We endured the worst financial crisis and deepest recession since the great depression.  Today we are much better off.

She then goes on to list lie after statistical lie in favor of such endurance.

The auto industry has made an impressive comback.  

 

Housing which was at the center of the crisis has turned a corner.  

 

Construction and home prices are up significantly.  We've made good progress.  

These lies are used with scare tactics to demonstrate the central banks mean business when it comes to their business of making money.  When refering to said crisis.

They affects were severe, but could have been worse.

At least she is honest in respect to how they make their money.

The Congress has entrusted the Fed with great responsibilities.  Its decisions affect the well being every every American.  That prosperity depends on the enterprise and productiveness of the American people.  

Basically she is saying that the Fed and the government make money on the backs of the people.  At least she is honest on that observation.

Oh, and does anyone else thinks she looks like a worm with a wig?

Yellen - Testifies to Congress:

http://www.youtube.com/watch?v=5A_6y0Wz0r4

George the baby crusher's picture

It's the old card game.  Watch the lady, where's the lady.....

dontgoforit's picture

All that Russian money - from Cyprus - and from the U.S. move to put sanctions on the 7 Ruskies.....that must be it.

mccvilb's picture

I tell you its those Monsanto inspired GMO Brussels Sprouts.

SoilMyselfRotten's picture

Oyyy, can you imagine what the next bar in that graph is gonna look like??

JamesBond's picture

well, it is a tangled web we weave, when first we practice to deceive

 

 

jb

FEDbuster's picture

What's my $100 trillion Zimbabwe worth?  I would like to trade it for something measured in troy ounces.

weburke's picture

they have the kite by the string. they wont be letting go. they dont want their wives to complain about a collapsed world of shopping. 

Quus Ant's picture

“If I had a world of my own, everything would be nonsense. Nothing would be what it is,

because everything would be what it isn't. And contrary wise, what is, it wouldn't be.

And what it wouldn't be, it would. You see?”

Supernova Born's picture

You heet the Canadian?

I 'heet' the Canadian? I don't know what you're talking about.

That's him! That's the motherfucker.

You hit the Canadian, yeah?

Canadian? Shit.

We're taking you back to Bruges.

Brilliant.

2¢Wurth's picture

well, it is a tangled web we weave, when first we practice to deceive.

But after we've practiced quite a while, how vastly we improve our style.

GoldSilverWolf's picture

"Yes I testify. I never had sex with that woman."

TruthInSunshine's picture

Yellen is really Larry Summers in drag.

FFS, peeps. Let's at least agree on the basic facts.

AGuy's picture

"That's no lady, that's my master."

Obi-Wan Kenobi: That's no chairman... It's a printing press! 
Han Solo: It's too big to be a printing press!... 
Luke Skywalker: I have a very bad feeling about this.

Han Solo:Yeah, I think your right. Full reverse! Chewie, lock in in those gold purchases ASAP!

 

NEOSERF's picture

Haven't seen Yellen's birth certificate, perhaps she is Russian?

Ham-bone's picture

All the TIC report tells us is where the transaction took place - not the nationality of the buyer nor the nationality of the ultimate owner of the Treasury nor where the money originated.

Visit the TIC frequently asked questions and they are quite clear...this data is an "imperfect estimate provided primarily bu US based custodians"

http://www.treasury.gov/resource-center/data-chart-center/tic/Pages/ticfaq2.aspx#q7

Ham-bone's picture

also of note from the Fed's "What we do" tab on their website...

International Operations

The New York Fed, representing the Federal Reserve System and the U.S. Treasury, also is responsible for intervening in foreign exchange markets to achieve dollar exchange rate policy objectives and to counter disorderly conditions in foreign exchange markets. Such transactions are made in close coordination with the U.S. Treasury and Board of Governors, and most often are coordinated with the foreign exchange operations of other central banks. Dollars are sold in exchange for foreign currency if the goal is to counter upward pressure on the dollar. If the objective is to counter downward pressure, dollars are purchased through the sale of foreign currency.

Another responsibility of the New York Fed is to serve as fiscal agent in the United States for foreign central banks and official international financial organizations. It acts as the primary contact with other foreign central banks. The services provided for these institutions include the receipt and payment of funds in U.S. dollars; purchase and sale of foreign exchange and Treasury securities; and the storage of monetary gold.

http://www.newyorkfed.org/aboutthefed/whatwedo.html

fonzannoon's picture

Ham-bone what cracks me up is when the data shows China sold some bonds the data is pristine and we have 2 weeks of Simon Black and Michael Snyder articles about China dumping bonds. When everyone is buying them however we should just chuck the data out the window.

Ham-bone's picture

lots of bias' looking for goal seeked data (pro and con)...regardless the authenticity or quality of the data

Biderman made it plain and clear that the "money" to buy US equities had no verifiable source...in Jan '10 Trimtabs showed the money had to be coming from "other" as all traditional (trackable) sources of "money" were showing no increases...do a little extrapolation and a little detective work on who has motive, means, and opportunity to accomplish a Fed goal of "assisting the US governments financing operations, full employment, inflation.

The TIC is showing where these purchases are being made.

Ham-bone's picture

Snapshot of holdings purchased via Belgium...not likely or neccessaily held by Belgium or Belgians

'00  Belgium $28 B -->  '07   $13 B  ---> '14  $310 B 

nearly a 25x increase but this is not unusual, likewise increases show up in Ireland, Switzerland, Norway, Russia???, and on and on. 

Ham-bone's picture

and then there's this...

The ESF can be used to purchase or sell foreign currencies, to hold U.S. foreign exchange and Special Drawing Rights (SDR) assets, and to provide financing to foreign governments. All operations of the ESF require the explicit authorization of the Secretary of the Treasury ("the Secretary").

The Secretary is responsible for the formulation and implementation of U.S. international monetary and financial policy, including exchange market intervention policy. The ESF helps the Secretary to carry out these responsibilities. By law, the Secretary has considerable discretion in the use of ESF resources.

The legal basis of the ESF is the Gold Reserve Act of 1934. As amended in the late 1970s, the Act provides in part that "the Department of the Treasury has a stabilization fund …Consistent with the obligations of the Government in the International Monetary Fund (IMF) on orderly exchange arrangements and an orderly system of exchange rates, the Secretary …, with the approval of the President, may deal in gold, foreign exchange, and other instruments of credit and securities.

http://www.treasury.gov/resource-center/international/ESF/Pages/esf-index.aspx

Ham-bone's picture

In '04-'08 (5yrs) the US ran a $3.47 T trade deficit vs. an increase in treasury debt ownership by foreigners of $1.4 T (of $2.45 T new Treasury debt)...$2+T of dollars not getting recycled...

In '09-'13 (5yrs) US ran a 2.45T trade deficit vs. $2.8 T increase in foreign treasury purchases (of $6 T new Treasury debt)...$400 B more dollars came home into Treasury debt than went out in trade...

Seems a bit counterintuitive...when countries have more dollars they buy less Treasury's at much higher yields and then when they have smaller trade surplus' they recycle all and then some into Treasury debt at far lower yields

Now with QE "ending" and no further Fed buying...it's up to the domestics (who've added zero since '00 and ownership of public Treasury debt has collapsed to 20%) and foreigners (who have skyrocketed to own 55% of all public note/bond debt)...the foreigners are supposed to continue rolling their massive positions and be a huge net buyer to avoid a US super rate spike whiiiiile the US trade deficit continues shrinking...ooooorrrrrr, the Fed has been the real "foreign" buyer since '08 and will maintain a mysterious Belgium/Ireland/Russsia bid to ensure rates only ever get lower?!?!  Which seems more logical???

mickeyman's picture

The worst word in the known universe is reviled among all civilized peoples, except on one planet, where they don't know what it means. That word is . . . Belgium.

http://hitchhikers.wikia.com/wiki/Belgium

Chandos's picture

Belgium's two main concerns are fine chocolate and pedophiles....it's a synergy....

Add good beer to the mix and the kids don't stand a chance...

pacboot's picture

Hells Yeah MHP! Just dumped my gold. I am ALL IN!!

 

Liquid Courage's picture

Gold foil covered ... chocolate is the new Tungsten!

Soul Glow's picture

We are dealing with a ruling elite that has no relation to any Nation-State.  They only bid in name.  The Rotheschildes once fought wars against each other, maybe they still do.

john39's picture

you mean their slaves fought wars....    rothschilds and their ilk see this as nothing more than sport.

Kirk2NCC1701's picture

Ergo, long jobs in Belgium.
Especially in Politics, Banking, Arms, NATO.
Beer and Chocolates have future in Belgium also.
Need to look at jobs there, no need to speak anything but English.

Buck Johnson's picture

Exactly, right on target not the F / funds of the IM.