• GoldCore
    07/23/2014 - 07:21
    Ukraine, Gaza, Iran, Isis, Syria and Turkey are all just pawns in a grotesque geopolitical game. All sides have their narratives. But in all cases, innocents must die ...

As The US Is To "Belgium" Treasury Buying, So France Is To ...

Tyler Durden's picture




 

As is now well-known, following the news broken first by Zero Hedge in May, Belgium, or rather "Belgium" (because clearly someone is using Belgian-based Euroclear as a front to cover their insatiable appetite for US paper) has emerged as the biggest buyer of US Treasurys in 2014, close to surpassing even the Federal Reserve as the biggest monetizer of the US deficit.

But what about other countries in the world, such as for example France: a country whose economy virtually everyone admits is in shambles, and yet whose bond yields have followed the rest of the world to slide to near record lows, hitting a tiny 1.70% most recently.

Here is the answer.

According to the just released balance of payments data from Japan, the top destination of Japanese offshore bond portfolio investments was.... France, followed in the #2 position by none other than the US.

Considering it is now everyone's patriotic duty to sell Treasurys (because otherwise the fabrication that the US economy is improving crashes and burns every time there is a concerted bond buying effort), one wonders how long until the US tells Kuroda and the Japanese Pension Funds that US paper is non-grata for purchases going forward.

As for France, we are confident they will gladly take every foreign bond purchaser they can find.

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Tue, 07/08/2014 - 10:08 | 4935142 Croesus
Croesus's picture

Crash, here we come! 

Tue, 07/08/2014 - 10:15 | 4935163 NotApplicable
NotApplicable's picture

"Please do not worry."

Tue, 07/08/2014 - 10:34 | 4935228 kliguy38
kliguy38's picture

Remain calm with your seatbelts fastened......for those of you that don't believe that bend over and kiss your ass goodbye

Tue, 07/08/2014 - 11:10 | 4935267 Manthong
Manthong's picture

So they do a real stress test and discover it is all Sushi?

.. and not fresh.

Tue, 07/08/2014 - 10:27 | 4935199 Jumbotron
Tue, 07/08/2014 - 10:34 | 4935226 Spitzer
Spitzer's picture

Kyle Bass, where are you ?

 

Told you math didn't matter. Who cares if all Japanese die , France will buy their bonds.

Tue, 07/08/2014 - 10:29 | 4935206 Stuck on Zero
Stuck on Zero's picture

The real task is to guess which shell has a pea under it.

Tue, 07/08/2014 - 11:04 | 4935313 CrashisOptimistic
CrashisOptimistic's picture

Actually that's not the real task.

The real task is civil lawsuit against Yellen, which would force her to testify under oath, and while she is under oath ask the hard questions.

That's when it gets interesting.  Have to find a lawsuit that is close enough in relevancy that those hard questions can be asked.

 

Recall that it was a lawsuit over sexual harassment that permitted the Monica Lewinsky questions while Clinton was under oath.  So a Yellen lawsuit over some financial matter in which she was involved might open the door during deposition.

Tue, 07/08/2014 - 12:01 | 4935572 eddiebe
eddiebe's picture

It will never happen, but if it did, she'll lie like a dog.

Tue, 07/08/2014 - 10:50 | 4935275 SAT 800
SAT 800's picture

Thinking about this article made me laugh. Japan is buying France's Euro Bonds; with what? I had the thought that this process resembles a team dog-paddling event. Japan has it's right arm tied around france's waist, and France their left arm tied around Japans waist; they are both up to their chins in the ocean; japan calls out, "okay, I'm going to paddle with my left hand, now; and France replies, okay, now I'll paddle with my right". At best, it's a kind of a Laurel and Hardy imitation of international finance; at worst; it's merely a farce. Compare this to 1949; when Japan had to transfer Gold to France if they bought some part of France's output. As the Women's cigarette ads say, "you've come a long ways baby".

Tue, 07/08/2014 - 11:11 | 4935344 SAT 800
SAT 800's picture

We're not really losing altitude; the ground is just rising a lot lately.

Tue, 07/08/2014 - 10:09 | 4935145 Bernoulli
Bernoulli's picture

Is that 2 Trillion YEN "France" supposedly spent? Not so much...

Anyways, Lagarde is behind this. All makes sense now.

Tue, 07/08/2014 - 10:50 | 4935277 Headbanger
Headbanger's picture

Detroit traffic jam no doubt..

Tue, 07/08/2014 - 10:53 | 4935289 SAT 800
SAT 800's picture

Thank You Belgium; for buying so many US War Bonds; I had no idea we needed so many waffles.

Tue, 07/08/2014 - 11:06 | 4935327 booboo
booboo's picture

"LEEEEEEROY JENKINS"

Tue, 07/08/2014 - 10:10 | 4935148 LawsofPhysics
LawsofPhysics's picture

"sell treasuries"?  WTF?  If that was the case yields would be going up.  They are not, they cannot!

FAIL on this article.  Saying that "the french like radioactive sushi" is just as viable an explanation at this point.

Tue, 07/08/2014 - 10:19 | 4935169 Dr. Engali
Dr. Engali's picture

That is what Tyler is saying. Nobody will sell treasuries advancing the illusion that the eCONomy is improving. They instead continue to buy forcing yields down suggesting that the eCONomy is still in trouble.

Tue, 07/08/2014 - 10:33 | 4935208 LawsofPhysics
LawsofPhysics's picture

Aside from bond traders, I don't know many people who actually own treasuries, at least not treasuries with these historically low yields.  I do know some old-timers with treasuries that are maturing with yields that are substantially higher. 

This is by design as the central bankers now own the treasury "markets" of the world.  Even these "highly educated" people still fail to understand that, in the absence of faith, all fiat will go to zero.

same as it ever was...

Tue, 07/08/2014 - 10:47 | 4935255 Dr. Engali
Dr. Engali's picture

Treasuries are important as collateral in order to maintain the current system. There are  still a large amount of treasuries being bought by hedge funds for the carry trade. The feds control enough where they can control the rates and may end up owning them all eventually, but not yet. 

Tue, 07/08/2014 - 11:02 | 4935310 centerline
centerline's picture

Until something dramatic happens in terms of soveriegn protectionism, this is a game of everyone going to thier knees simultaneously.  Eventually something will crack.

This very process however is what assures us of a cascading global clusterfuck.  Everyone has their eyes on critical resources (each with their own free shit army barely pacified), barely hanging onto power, and trying to push thier neighbor into their own zombie apocalypse first.

Tue, 07/08/2014 - 11:10 | 4935331 CrashisOptimistic
CrashisOptimistic's picture

Guys, every retirement mutual fund in the US has US Treasury allocation % as a requirement in the bylaws.

There's no scarcity of buyers. They exist systemically.  The funds all buy Treasuries.  Every day there is a maturing event they buy, in order to maintain their bylaw mandated asset allocation reqmt.  It's auto pilot rebalance.

And as equities advance, to hold the bylaw % in place, they have to buy even more US Ts.  If equities fell, they don't have to sell US Ts because the US T asset allocation reqmt in the bylaws is a MINIMUM, not a target.

Tue, 07/08/2014 - 11:15 | 4935363 Dr. Engali
Dr. Engali's picture

Yes, I know. Insurance companies continue to buy in order to hedge their positions as well.

Tue, 07/08/2014 - 13:25 | 4935923 Imagery
Imagery's picture

Doc, you forgot the sarc disclaimer.  If what you say is true, we really have entered the Twilight Zone and I can tell you what will soon "break", ie, the insurance companies!  Buying USTs with +- Negative 4% Real Yields to "hedge" against lesser losses just about anywhere else is truly beyond my pay grade for rationalizing.

Tue, 07/08/2014 - 15:11 | 4936433 Dr. Engali
Dr. Engali's picture

1) I never use Sarc disclaimers. If people don't get sarcasm then fuck them and their stupidity. 2) insurance companies are buying treasuries hand over fist, however lower rates mean they have to lower benefits and raise costs. They are in a precarious place right now.

Tue, 07/08/2014 - 14:59 | 4936382 LawsofPhysics
LawsofPhysics's picture

The question is whether or not those mutual funds will be sacrificed or not?  I have often wondered if Bill Gross was simply "planned opposition" or not.  Go ahead, sacrifice all those pensions, I dare you...

Tue, 07/08/2014 - 10:57 | 4935297 SAT 800
SAT 800's picture

In 1905 highly educated people; Physics Professors, believed in the Luminiferous Ether; right now, highly educated people believe the 3.7 Co2 molecules in every 10,000 air molecules have an important effect on the heat balance of a planet; People are much, much, stupider then they know.

Tue, 07/08/2014 - 11:08 | 4935332 Davos
Davos's picture

i particulalry like phlogiston theory

Tue, 07/08/2014 - 11:55 | 4935551 MrSteve
MrSteve's picture

Being in quibble-like mode, I think you misspelled particularly and flogiston has never existed, so its spelling is whatever you want it to be...

Tue, 07/08/2014 - 13:45 | 4936014 donsluck
donsluck's picture

SAT 800 - Before industrialization the CO2 concentration was 280 parts per million or 2.8 Co2 molecules in every 10,000 air molecules. It now exceeds 4.0. That's a 43% increase in what is normally a very stable ratio. To discount effects due to small numbers is, shall we say kindly, simple. As you should be aware, life is not simple. See http://www.acs.org/content/acs/en/climatescience/greenhousegases/industrialrevolution.html

Tue, 07/08/2014 - 10:25 | 4935198 Cognitive Dissonance
Cognitive Dissonance's picture

This is not the sarcasm you are looking for.

Tue, 07/08/2014 - 10:10 | 4935150 Kaiser Sousa
Kaiser Sousa's picture

really?

Tue, 07/08/2014 - 10:12 | 4935153 christofay
christofay's picture

Yeah, sell Ts? Otherwise okay hearding Nips into Francs

 

Tue, 07/08/2014 - 10:12 | 4935154 eddiebe
eddiebe's picture

I don't understand. Why would the US tell Japan to quit buying our debt?

Tue, 07/08/2014 - 13:48 | 4936026 donsluck
donsluck's picture

The FED (not in any way the US) would like US interest rates to go up JUST ENOUGH to signal an "improvement" in the US economy. Silly, I know.

Tue, 07/08/2014 - 10:14 | 4935159 Incubus
Incubus's picture

importing mongols to battle the islamic invasion

Tue, 07/08/2014 - 10:17 | 4935162 Kaiser Sousa
Kaiser Sousa's picture

and heres how fiercely they r attempting to keep Silver away from $21 and double digit change....

http://www.pmbull.com/silver-price/

http://www.silverseek.com/

http://www.kitco.com/charts/livesilver.html

Tue, 07/08/2014 - 10:19 | 4935182 youngman
youngman's picture

French Bonds smell and they do not shave

Tue, 07/08/2014 - 10:24 | 4935192 astoriajoe
astoriajoe's picture

I reckon the bonds will receive something of a shave at some point in the future.

Tue, 07/08/2014 - 11:08 | 4935335 SAT 800
SAT 800's picture

They'll be as hairless as a Eunuch and as impotent.

Tue, 07/08/2014 - 15:45 | 4936586 Analyse2
Analyse2's picture

@youngman

By emitting these kind of racist comments, you are discrediting yourself.

Tue, 07/08/2014 - 10:20 | 4935183 Sudden Debt
Sudden Debt's picture

France has cracked down a bitcoin "trafficer" and seized all the bitcoins.

Brussels is also looking into it and so is spain.

Tue, 07/08/2014 - 10:25 | 4935195 astoriajoe
astoriajoe's picture

so...buy bitcoin?

Tue, 07/08/2014 - 10:33 | 4935220 Sudden Debt
Sudden Debt's picture

why would you want to do that?

Tue, 07/08/2014 - 10:36 | 4935235 Spitzer
Spitzer's picture

They  are going after these BTC guys in meat space. Not cyber space.  Most of the silkroad guys were caught in meat space too

Tue, 07/08/2014 - 10:59 | 4935305 SAT 800
SAT 800's picture

There's a delusion born every day; and a fool to support it.

Tue, 07/08/2014 - 10:21 | 4935185 buzzsaw99
buzzsaw99's picture

damn, jap investors really have gone meshugenah

Tue, 07/08/2014 - 10:28 | 4935190 americanspirit
americanspirit's picture

Usually when an entity is accumulating the 'paper' of a targeted company it is because they have a plan. In this case there must be a plan for the US that will be executed when their holdings reach a certain level. Unless somebody out there thinks they are going to get rich at under 1% interest, I have to assume that they have some strategic reason for all the Brussels buying. And since it is happening in secret ( come on NSA, tell us) chances are that the outcome for the US will not be a happy endng.

And yet I have not seen a single dicussion of what that plan may be, nor of the potential consequences. This "Brussels" buying has been going on long enough that I suspect the goal of whoever is doing it must be nealy achieved.

I am somehow reminded of a flock of turkeys in a heavy rain, gaping at the sky, beaks wide open, understanding nothing, drowning.

Tue, 07/08/2014 - 11:05 | 4935323 centerline
centerline's picture

Sizable position makes for a big stick.  Gets attention when attention is needed.  Or, can be used as blunt instrument of course.  Or, simply to move markets if played right.

Tue, 07/08/2014 - 11:07 | 4935330 Oquities
Oquities's picture

if i were the U.S., i would push for SDRs sooner rather than later, given trade settlements done and proposed by BRICs, Iran, Russia and some of Europe.  that way my monetary scare would be blunted, instead of a potential $USD run when crisis hits.  these inter-border Treasury bond purchases may reflect final shuffling of debt among the conspirators (nations and people) to adjust off-kilter country balances pre-default, and pro-rata re-assignment to the SDR unit.

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