• Steve H. Hanke
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    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

Russia Dumps 20% Of Its Treasury Holdings As Mystery "Belgium" Buyer Adds Another Whopping $40 Billion

Tyler Durden's picture




 

Back in mid-March, there was a brief scare after the start of the Ukraine conflict, when Fed custody holdings plunged by a record $104.5 billion (if promptly bouncing back the following week), leading many to believe that Russia may have dumped its Treasurys, or at least change its bond custodian. We noted that we wouldn't have a definitive answer until the May TIC number came out to know for sure how much Russia had sold, or if indeed, anything. Moments ago the May TIC numbers did come out, and as expected, Russia indeed dumped a record $26 billion, or some 20% of all of its holdings, bringing its post-March total to just over $100 billion - the lowest since the Lehman crisis.

 

But as shocking as this largely pre-telegraphed dump was, it pales in comparison with what Zero Hedge first observed, is the country that has quietly and quite rapidly become the third largest holder of US paper: Belgium. Or rather, "Belgium" because it is quite clear that it is not the country of Begium who is engaging in this unprecedented buying spree of US paper, but some account acting through Belgian custody.

This is how we explained it last month:

... to clarify for our trigger-happy Belgian (non) readers: it is quite clear that Belgium itself is not the buyer. What is not clear is who the mysterious buyer using Belgium as a front is. Because that same "buyer", who to further explain is not China, just bought another whopping $31 billion in Treasurys in February, bringing the "Belgian" total to a record $341.2 billion, cementing "it", or rather whoever the mysterious name behind the Euroclear buying rampage is, as the third largest holder of US Treasurys, well above the hedge fund buying community, also known as Caribbean Banking Centers, which held $300 billion in March.

 

In summary: someone, unclear who, operating through Belgium and most likely the Euroclear service (possible but unconfirmed), has added a record $141 billion in Treasurys since December, or the month in which Bernanke announced the start of the Taper, bringing the host's total to an unprecedented $341 billion!

Make that an unprecedented $381 billion because as we just learned "Belgium" bought another $40 billion in March!

Curiously, this happened as Japan sold $10 billion in TSYs, and as China remained unchanged.  Further, foreign official accounts actually declined from $4.069 trillion to $4.054 trillion, which means this is what the US Treasury would classify as a "Private" buyer. 

So to summarize, of the total $60 billion increase in foreign Treasury holdings, which rose from $5.89 trillion to $5.95 trillion, "Belgium" accounted for two thirds, most likely doing the purchases under the guise of a "private", unofficial account!

And once again, it is Belgium in "", because whoever is buying through the tiny European country, whose GDP is just double its reported total TSY holdings, is neither its government nor its people.

The question remains: who? Who has bought a whopping $200 billion in Treasurys using Belgium as a proxy since October?

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Thu, 05/15/2014 - 09:26 | 4762180 GetZeeGold
GetZeeGold's picture

 

 

 

Those boys from Belgium sure have got lots of cash.

Thu, 05/15/2014 - 09:28 | 4762199 giggler321
giggler321's picture

Probably have more Belgium buns than cash.  The Fed'up work in mysterious ways but will ultimately fail when China sees the writing and poops aswell

Thu, 05/15/2014 - 09:29 | 4762203 Gene Parmesan
Gene Parmesan's picture

The farce is getting to the point where it can no longer be ignored.

Thu, 05/15/2014 - 09:33 | 4762222 NotApplicable
NotApplicable's picture

We are!

Thu, 05/15/2014 - 09:35 | 4762237 DaveyJones
DaveyJones's picture

when will the Belgium buyer begin to waffle?

Thu, 05/15/2014 - 09:39 | 4762256 Latina Lover
Latina Lover's picture

When their toilets are choked with US dollars, Zimbabwe style.

Thu, 05/15/2014 - 09:42 | 4762268 Haus-Targaryen
Haus-Targaryen's picture

I have a few Trillion ZD lying around somewhere. 

Thu, 05/15/2014 - 09:50 | 4762314 Serfs Up
Serfs Up's picture

In totally unrelated news, the Fed continues to fight being audited.

Thu, 05/15/2014 - 09:51 | 4762325 THX 1178
THX 1178's picture

Is this belgian account preparing for a gigantic dump sometime in the near future in order to blow up the bond market?

Thu, 05/15/2014 - 10:00 | 4762364 SamAdams
SamAdams's picture

Maybe Latvia will then become the new largest holder of US paper?

Thu, 05/15/2014 - 10:17 | 4762441 sodbuster
sodbuster's picture

Just another example of TPTB trying to prop up the rigged and manipulated ponzi scheme.

Thu, 05/15/2014 - 10:21 | 4762462 john39
john39's picture

what is a ponzi scheme when the fraudster has to buy all the bogus investments?

Thu, 05/15/2014 - 10:31 | 4762484 nope-1004
nope-1004's picture

A Federal Ponzi

 

Thu, 05/15/2014 - 10:36 | 4762527 Stackers
Stackers's picture

My vote is on Kevin Henry

Thu, 05/15/2014 - 10:47 | 4762569 Oh regional Indian
Oh regional Indian's picture

In a fractal world, someone's ass just got kicked.

India's ass is getting kicked...

Rant...

http://aadivaahan.wordpress.com/2014/05/15/mera-bharat-mahaan-ahhhaaaaha...

probably true in many places...

ori

Thu, 05/15/2014 - 10:59 | 4762607 Manthong
Manthong's picture

It’s amazing what the Fed can do through the magic of $ Trillions in swaps that will not settle at an inflation adjusted valuation and might never settle at all.

Heck, you can back up €1.7 Trillion in LTROs, move the Euro/USD from 1.27 to 1.38, depress PM bullion prices (temporarily), float broke EU banks, buy UST’s in “secret” accounts and even (temporarily) displace the effect of a global dump of dollar assets.

Absolutely f’n genius.

Of course they do not expect to be held to account when it comes time deal with the billions of people they have screwed.

There might be a few incorrect assumptions in their models.

Thu, 05/15/2014 - 11:06 | 4762645 wallstreetapost...
wallstreetaposteriori's picture

Who ever it is, they are smart.   Interest rates are going to have to plummet before all hell really breaks loose.

Thu, 05/15/2014 - 11:32 | 4762731 mvsjcl
mvsjcl's picture

Rothschild being forced to buy back some of his worthless paper. Gonna piss him off pretty soon.

Thu, 05/15/2014 - 11:48 | 4762778 dontgoforit
dontgoforit's picture

Is the EU Central Bank the New World Fed?

Thu, 05/15/2014 - 12:01 | 4762840 SafelyGraze
SafelyGraze's picture

it isn't QE if belgium does it

Thu, 05/15/2014 - 12:06 | 4762856 Keyser
Keyser's picture

Maybe Latvia will then become the new largest holder of US paper?

Ukraine has just had a windfall at the west's expense, so they will be returning the favor in short order, along with Cyprus... 


Thu, 05/15/2014 - 12:19 | 4762911 Patriot Eke
Patriot Eke's picture

Being ruled by bankers "works" as long as the banker's rules work in their favor.  When the rules stop working in their favor however, the bankers tend to change the game to 52 card pick up.

Thu, 05/15/2014 - 12:57 | 4763084 Manthong
Manthong's picture

“Is the EU Central Bank the New World Fed?”

No, the IMF with SDR’s is.

(but still Fed/EU controlled er.. Rothschild/Warburg et al controlled)

Thu, 05/15/2014 - 14:17 | 4763259 free_lunch
free_lunch's picture

NEW!!!    EUROMANIA  a must see documentary about how the corporations have killed democracy in Europe to let the banks and big corporations rule as dictators.

A filmmaker on a search to uncover the European Union: does Europe provide jobs and democracy, or is it a big business project? A personal and revealing documentary from the creators of the 2012 hit Panopticon. EUROMANIA shows what is happening to people and countries all over Europe.

Watch free on you tube: http://www.youtube.com/watch?v=hkCe43V3XFc

Thu, 05/15/2014 - 11:56 | 4762813 cro_maat
cro_maat's picture

Why would they be pissed off? They bought Treasury debt with digital fiat that cost them $0 to create.

Next they will trade these bonds for resources / land in the U.S. when the US Treasury officially declares bankruptcy.

Brilliant!! Until the torches and pitchforks find your extended family.

Thu, 05/15/2014 - 12:39 | 4763016 CheapBastard
CheapBastard's picture

"Yes We Can!"

Thu, 05/15/2014 - 20:37 | 4764784 monkeyshine
monkeyshine's picture

Jean Claude
.
.
.
.
.
Van Damme!

Thu, 05/15/2014 - 13:05 | 4763112 Ham-bone
Ham-bone's picture

why isn't ,the same curiousity taken about even smaller, even broker Irelands massive increase in Treasury holdings

'07---> $19 B  '14 ---> $115 B???

But look @ the bigger picture...

BANKING EURO

'00                       '07              '14

Ireland $5 B --->  $19 B  ---> $113 B

Belgium $28 B -->  $13 B  ---> $381 B

Switzerland $18 B> $34 B  ---> $175 B

Luxemburg <$5 B-> $60 B --> $145 B

TOTAL    $56 B       $116 B       $815 B  (1400%+ increase)

Belgium is just the most recent torch carrier for EU treasury buying...

Thu, 05/15/2014 - 13:29 | 4763134 Ham-bone
Ham-bone's picture

Compare and Contrast

CORE EURO

                '00           '07            '14

Germany $54 B ---> $50 B ---> $63 B

Italy      $20 B   ---> $14 B ---> $31 B

Netherland $13 B-> $15 B ---> $35 B

France   $27 B  ---> $10 B ---> $57 B

Spain    $20 B   ---> $<5 B ---> $23 B

TOTAL   $134 B      $94 B         $208 B  (55% increase)

Thu, 05/15/2014 - 15:24 | 4763674 hobopants
hobopants's picture

Wow... they need to make this a blogpost in and of itself, really puts things into perspective, thanks Hambone. On a side note the countries buying hand over fist are all known for their "discreet" foriegn investment services no?

Thu, 05/15/2014 - 21:21 | 4764925 new game
new game's picture

really after 2 years of watching the ponzi go here and there, there is truely no end to this game.

why would it blow up? they learned in 08 they can paper any problem with more debt. japan is the future.

paper the paper that is being papered til paper is papered like a 300 year old wall...

Thu, 05/15/2014 - 20:01 | 4764692 globalvagabond
globalvagabond's picture

Using Belgium as a tool must be extraordinarily difficult.  A country with universal (and compulsory) voting where only 70% of the citizens turn out.  A further 400k votes (the difference between 1st and 2nd place to lead the "parliamentary democracy") were invalidated - 3% of those citizens who did turn up to vote can't read, understand and follow the voting directions.  A socialist runs the federal parliamentary democracy under an impotent constitutional monarch.  Belgian waffles for everyone!

Thu, 05/15/2014 - 10:40 | 4762528 MillionDollarBonus_
MillionDollarBonus_'s picture

.

Thu, 05/15/2014 - 10:54 | 4762605 JPM Hater001
JPM Hater001's picture

I feel robbed.  Put it back so we have someone to beat on.

Thu, 05/15/2014 - 11:32 | 4762734 sushi
sushi's picture

Must have been good since nobody liked it.

Thu, 05/15/2014 - 12:55 | 4763081 silverserfer
silverserfer's picture

for those of you that missed it " I heart banker cock in my ass and in my mouth. literaly.-MDB"

Fri, 05/16/2014 - 06:24 | 4765679 GetZeeGold
GetZeeGold's picture

 

 

 

 

Heh heh....THANK YOU!

Thu, 05/15/2014 - 12:31 | 4762979 Kirk2NCC1701
Kirk2NCC1701's picture

OT, but related:  Jim Rickards just commented on his blogspot (http://jimrickards.blogspot.fr) that "Canada should build up it gold reserves".

That would be fine, were it not for the fact that it's ALWAYS been a colony/bitch of the UK or the US.  The last time they did this, all the gold moved to NY.  So now they choose to keep it in the ground till they need it.  IOW: "You want our gold?  Come and mine it yourself, MFers!"

In the meantime, shrewd and informed Canucks are and should be "stacking" privately.  It's a BIG country, with lots of places to "store" it, or lakes to lose it in.

Thu, 05/15/2014 - 19:59 | 4764687 Seer
Seer's picture

I"m long Canada, though it, as the case for all, isn't going to be dancing...

A difficulty that resource rich countries will face is that extraction costs will increase dramatically due to lower volumes (less exports), which will kill economies of scale.  And given this it would seem that one might reconsider the notion of leaving it in the ground: it's really a tough call.

Thu, 05/15/2014 - 12:48 | 4763056 Yes We Can. But...
Yes We Can. But Lets Not.'s picture

Your most concise and sensible post ever. 

Period.

Thu, 05/15/2014 - 20:06 | 4764704 disabledvet
disabledvet's picture

It's not for lack of trying.

Much the same is true for South Africa as well.

New York and London still have an almost total chokehold on liquidity...ALL liquidity....STILL.

I understand what I say and how I say it makes me a very disliked person...but start telling me why I'm right and why that matters and then I'll stop being a jerk.

I want the USA to succeed...and Canada, and the UK, and Europe, and South Africa, etc.

Their success is my success...I am a free trader at heart.

But in the real world we don't always get sanctity of contract...or just "being honorable."

In the real world we usually get something far different.
How we try and guide those away from the shoals of misfortune is an ugly business. But no matter how ugly my communication I know of no one who would argue I'm not pushing towards a better place where prosperity not only exists but can be shared.

He'll I'm sharing actual success! Try and find that in all your investment newsletters and magazines.

My results are MEASURABLE.

Thu, 05/15/2014 - 21:04 | 4764872 Chief Wonder Bread
Chief Wonder Bread's picture

I know that I'm a relative newbie and you've been here for awhile but

can you please study remedial kevinearick

before you comment here anymore.

Thu, 05/15/2014 - 10:26 | 4762478 Arius
Arius's picture

Does it really MATTER ?

 

They will continue to play this game until they change the rules to something else.

 

Everything has been telegraphed that will happen soon .. i guess this is part of the process ... yeah well!

 

those stories about Obama golfing make a more interesting audience for gladiator fighting ... BRING IT ON !

 

Vive la liberty!  another oxymoron ....

Thu, 05/15/2014 - 10:35 | 4762524 Colonel Klink
Colonel Klink's picture

Off topic:

George Washington, something to look into: http://www.breitbart.com/Big-Government/2014/05/14/Dept-Of-Agriculture-O...

Why does the USDA need submachine guns?  Could it be for the purpose of controlling food sources?

Thu, 05/15/2014 - 10:43 | 4762548 SoberOne
SoberOne's picture

Sounds like a badass gun!

Thu, 05/15/2014 - 11:08 | 4762655 LawsofPhysics
LawsofPhysics's picture

It is a very dependable one and the rounds are pretty common.

Thu, 05/15/2014 - 11:18 | 4762688 pods
pods's picture

Sounds like they picked the MP5-40 or UMP40 and then put out the bid.

Oh to have one of those.

pods

Thu, 05/15/2014 - 12:23 | 4762943 Patriot Eke
Patriot Eke's picture

I have no evidence to confirm this theory, but all of these purchases by random agencies, that on the surface would seem to not need them, could be a way to arm the new "civilian army" we've all heard countless rumors about (not to mention Obama's speech on the topic).

Thu, 05/15/2014 - 13:00 | 4763103 Payne
Payne's picture

All of those guns will disappear out of the FEDs hands into Organized crimes hands in some fashion either aided by Mr. Holder or not.

The boxes will still be in the warehouse just empty.

Thu, 05/15/2014 - 12:30 | 4762975 Oxbo Rene
Oxbo Rene's picture

I had an MP-40 once upon a time, had German swastika's (sp)
on it and all.......
Then one day I got a little carried away with it, and the feds decided I didn't need any guns anymore .........

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