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Americans Dump The World, As The World Dumps America
It is only appropriate that in the days after Valentine's day, the theme of dumping is revisited. Specifically that of securities. As was pointed out yesterday following the latest TIC data, there was a lot of dumping of US Treasurys by foreign official authorities, with both China and Russia (but not only) proceeding to sell a demonstrative amount of US paper. However, that is not all. As the first chart below from today's Bloomberg Brief shows, foreign purchases of US corporate bonds has once again rolled over and remains quite week. As Bloomberg notes: "Foreign investors appear to have little faith in the U.S. economic recovery. They sold $20.7 billion of corporate bonds in December, leaving the one-year mean at minus $3.6 billion. That compares with a 12-month average of $47.3 billion in May 2007. Acquisitions of U.S. stocks were also weak. They totaled minus $11 billion versus a 12-month average of $2.1 billion." And in a stunning display of reciprocity, US residents, not content with selling of US stocks as retail outflows soared in December, also proceeded to dump the rest of the world en mass, as the net sale of foreign securities by US Residents soared to an all time high. US Residents "sold $38.9 billion of [foreign securities] on a net basis in December. That compares with average monthly purchases of $9.8 billion over the last year. The breakdown revealed that the headline number consisted of sales of $28.1 billion of foreign bonds and of $10.8 billion of foreign equities." Which makes sense - if decoupling is (transitorily and erroneously) present in the economy, it should also be present in securities flow. As it was in December. Which means that as globalization returns, the reversal in securities flows will have a dramatic impact on target economies, and doubly accentuate the regression to the mean.
World does not like America...
...As Americans do not like the world.
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http://video.google.com/videoplay?docid=4167926428522965274
We'll be destroyed when I SAY we will be destroyed....
"China and Russia (but not only) proceeding to sell a demonstrative amount of US paper"
Paper, backed by paper and the full faith and credit of the US governments promise to pay back with paper that represents paper (and some ink) or better yet, digital data on a computer drive.
I read that the average computer contains about a 1/10 of an ounce of silver, and not quite a gram of gold. Maybe the natural progression should be to move toward a computer backed currency to support all those ones and zeroes contained on the respective hard drives.
Like most embedded links on ZH, the above link, provided by diogeneslaertius, is OT and a waist of time - a troll link.
Were they selling so they could buy some iJunk for Christmas, or is it time for isolationism, you foreigner bitchez?
HoofHearted, are you trying to make sense or is your style of writing simply a stream of consciousness, reflecting an internal cacophony of psychobabble??
Expat, i have one word for you.
Bitchez
The World must remain solvent longer than the Market remains rational.
"YES we can!" /sarc
And the landslide begins...whatch out below, oh wait, I am at the bottom of the moutain, damn it..
That's a Lahar for you. Not laugh, but mudflow.
Decoupling, bitchez. Certainly not bullish for the $.
At this point, without involving extra-terrestrials or the invention of pocket fusion reactors, I can't imagine any possible bullish case for the $.
that looks like a chart for Corporate bonds. Anywho i like to keep this topic simple: "how's the greenback doing?" it should have been destroyed with the total collapse of Wall Street and all the banks. Instead it appears "fair to middlin'" is the answer. As a "so called recovery" takes hold a "rationalization" in the infrastructure build out will begin to take hold. Two words: "Yao Ming."
DV, the USD is going to spike when investors panic. They are going to sell everything foreign and buy quality UST/USD assets. Once the panic subsides, the USD decline will begin.
So, American isolationism could still win out in the long run. Maybe just not by choice... And globalist banksters actually created this outcome.
Can't make this stuff up.
does net sales of foreign securities by US include ETFs like FXI and EWZ? At any rate, the Fed can simply just buy every bond out there at will. Then we can spend $$ on more important things like iPhones and craigslist junk. Bullish.
Let's call it "Return To Turtle Island" with profound apologies to indigenous peoples.
A country that has a chronic trade deficit of 1T per year and debt of 15T can it decouple with the currencies of the world; can it stay indifferent to treasury notes coming home to roost?
Sounds like the signs of monetary decoupling and trade shrinking; its every region for itself, and damn the consequences if this goes from creep to gallop. I guess as long as USA can buy its imported oil in USD it feels safe. How about US exports?
What is happening: Fed is exporting a lot of inflation abroad that causes enormous social stresses and can ultimately lead to unrest very similar to Arab Spring in any country running consistent trade surplus. They also realize more and more that when they recycle their dollars back in USTs, they just perpetuate the same cycle - borrow, spend, borrow more. There is no hope of getting money back by running negative trade deficit with the US for some time as trade settlement did not occur for several decades, neither there is any intention of doing so.
Where it is going: leading exporters going will try and push dollar out of bilateral trade, replace it with swaps for each others currency or outright settle trade in gold (how it worked before btw). In the meantime they continue to dump treasuries (or simply don't roll the over) and try to convert their USD holdings into something tangible or simply spend them while dollar holds its value. In the meantime, Americans sell any foreign assets to cover shortage of dollars that flow outside of the country thanks to consistent trade deficits.
How it will end: at some point, when dollar is less and less used in trade settlement, a whole avalanche of them goes back to US to cause enormous inflation. Or, US finally comes out with a plan to settle accumulated trade deficits with some sort of arrangement with its biggest creditors (less likely given the extent of the problem).
How will dollars coming back to US cause 'enormous inflation?' The US economy needs an enormous inflow of money from abroad to grease its economy and provide money velocity. The US needs to boot its wages and create 20 million additional jobs.
The local billionaire elites tied up all their US money in all sorts of Ponzi schemes running up cost of gas, food, gold and other commodities and ain't spending a nickel to boost the local US economy--there is almost no money velocity in the US. What money velocity there is , exists solely because of lower classes spending 100% of their income.
Ponzi schemes do not preclude inflation from occuring, they merely suck any productivity left out there, they also drive money printing since those making or affecting such decisions are invested into them. And don't worry about money velocity, once it is clear that currency is nearly worthless, money will start changing hands fast. Fast to the extent that there is a short-lived illusion of economic revival until it all finally goes down.
Finale is when elite has the only hard money left, majority is empowerished, ponzi schemes liabilities devalued. That's the time when the system reset is complete.
"empowerished", heh, they wish.
Well, if there was any question as to whether they are preparing for an American Crash I think that has been solved.
Oh, and the USD is up on the news that the world is dumping US paper. No doubt due to the euro follies. Yes, all the smart money is fleeing to the strength and stabilty of the US dollar. Which is backed by the "full faith and credit" of the USA. Uhhh, ya.
Can't make this stuff up II.
slowest train wreck ever....yawn
This story sure makes the idea of the US having to roll over trillions of debt in '012 seem like no big deal. Should be a piece of cake. There's so much money out there right now and the US under Obama is such a strong bet. No problemo.
This article has given me a whole new humor sub-genre to pursue. I will call it "Understatement Captions".
The caption on the first chart "Foreign Purchases of U.S. Corporate Bonds Remain Weak".
It's like seeing the picture of the Hindenburg in flames and labeling it "Airship Schedule for Remainder of May Remains Uncertain".
Gold Bugz getting yet another harsh lesson.
Miners are getting taken out back and shot, along with PCLN, AMZN, AAPL, etc.
Heh, they should be cheering for AAPL to go to $800 if they ever want to see GLD make new highs, or if they ever want to see NEM ever clear $70 again.
AEM getting blowtorched, that thing is down more than 60% from the highs already.
Notice to Newbies:
RobotTrader is one of the least talented trolls on ZH. But please bear in mind that ZH is a very challenging environment for such beings. Please try to engage with him a little, even if it's boring as hell -- or he could be derezzed like Johnny Bravo.
Thanks in advance.
Robo... lesson for you.
If you hold gold or silver physical, you don't sell.
When prices fall, YOU BUY. as long you mind what your price per ounce average is.
Let em fall! I'm spotting a railcar.
Gold Bugz celebrating another blue light special. Time to exchange fiat for physical FiSHeS!
God, you're just so right there! I mean, it sure sucks beyond belief going through life with a portion of our wealth sitting in the best performing asset of the last 10 years. The only one w/o counterparty risk in these nutty times. The same asset to be found in the safes and vaults of every rich and/or smart person in the world. The substance that JP Morgan himself said is the sole definition of Money.
In light of all that, I'll bet a really smart person like you has quite a stash too. After all, aside from gold, everything else is debt. We all know you know that.
Weren't you just proclaiming $50k 401k to $350k in three months just a few days ago?
See that's the problem with a 401k. It isn't money in the bank and you can't just sell the stock and cash out. Over the long run now you have a better chance of ending up with nothing unless you are lucky enough to retire at the exact moment of a bubble top.
I can call out the day's winners and losers pretty easily too. There's this thing called a computer and the internet where you can find out all kinds of information about stocks. Wow.
of course the 'tard advised us day before yesterday when gold was strong that gold was signalling a big move up in the s&p. today he's advising the naive among us of the reverse.
robot trader: lowering the bar at zh since 2010.
Foreigners don’t believe one word of the Obama bullshit, while Americans are eating it up. Recovery summer, green shoots, 8.3% unemployment, low inflation, you name it and the reports are lies and propaganda. The Russian, Chinese and rest of the sophisticated world can see the mess yet the US propaganda machine has convinced the American people that all is well in fairly land! Obama is the biggest failure ever to hold any office in America and yet some Americans are considering him for another 4 years of failure. Exactly what happens when the handout generations vote themselves a raise. This is beyond my comprehension!
Your vote and mine will cancel each other, so don't bother to vote.
With luck, Bill Clinton will receive an appointment in the next administration.
Spoken like a true american idiot who has never spent any time abroad. I see you still believe in the two party lie. Bloody sheep.
I sell to china and russia all the time and have been to both countries many times. Interestingly, both countries are buying gold. Perhaps I should settle in gold next time I deliver a ton of soybeans. The world should be careful what it wishes for, that goes double for overpopulated countries that have a hard time feeding themselves.
Wake the fuck up dude.
MFL8240
Give it a rest. The "handout generation" voting themselves a raise?
If only the malicious and upward flow of wealth could be reversed that way.
Try to "comprehend" that the two major parties both promote war and financial racketeering, and both field ser-vile candidates each arguably worse than the other.
The "handouts" and redistribution of wealth is upwards. Only the simple-minded and/or gullible believe the propaganda that the basic problem is that workers and the poor are getting too many "handouts".
The world will go back to Chairsatan once Europe totally implodes. Why do you think Moody is downgrading Europe? So that more money goes to the US.
More money to a country with 17 Trillion in debt and growing? They are not that stupid, Brazil, Chile, and other parts of South America have growth and are not overwhelmed with handouts and debt.
The debt is not the issue anymore.
It could be a 100 trillion and they still dont care in DC.
If you noticed, the Federal Forms and Paperwork Act has finally had some impact. Lawmakers in Congress vote on ideas after a short debate with no papers in hand.
Now if they suffered a Maniac break down at the Fed and gave each American Citizen on record 10 million by direct deposit or check this month...
This nation will boom. No doubt about it.
Outside of whack job finacial engineering and a giant money printer at the Fed, what does the USA actually have to offer the world?
Caterpillar? Fuji Eavy and a ton of German corporations make equipment just as good.
Boeing? Airbus can take on any order.
Intel? They pretty much aren't even American anymore.
Apple? Other than the pocketbooks of stock holders, Apple going away wouldn't have any effect on the world. Besides Apple would just relocate.
With 7 bilion people in the world, multinationals don't care about 300 million Americans anymore. They only care about being headquartered in a place where they can run financial scams and have unlimited access to free money. The issue with decoupling is that the US populace no longer has the skill level to produce for itself without the multinationals spoon feeding us products.
One small differnce. The rest of the world is not addicted to spending.
Credit is becoming more freely available to Asian, Indian and south American consumers - they too will get the spending bug and their debt slavery will be ensured.
Um...the Marines? Depleted uranium?
Besides an occasionally inarticulate "um," does mick_richfield stutter and say "uh" when he speaks? Does mick_richfield have either any depth of wisdom or anything of value to offer from the USA, or is mick_richfield not an American?
Well.. um .. yeah! I mean -- ahhh. What was the question again?
Hey, at least we are very good at making Nuclear Warheads, I mean that always ends well. /Sarc
Bernanke and the Federal Reserve banksters will enable Obama to increase the debt levels to another historic high.
Rinse and repeat until the rest of the world says no more.
A loss of faith in the US dollar is the only cure. A decline of the US credit card is the only discipline politicians in the US understand.
World does not like America...
Who does? Not even Americans like America anymore. America now sucks big time... it's the new USSR and getting worse.
Wrong! We love this country yet we dispise this group in DC and the Jewish banking gangsters that are robbing what is left of this country. Replace them all and we can get back to our greatness.
We need a Greek solution: declare Washington DC it's own country and kick it out of the union. We just have to make sure all of the politicians are there, and that none of them can sneak back into our country. Then they can be responsible for paying off all of the money they borrowed, and we can get back to minding our own business.
"Everybody has to dump on somebody!
Nobody can do it straight, right?
My pa gets dumped on at work,
so he dumps on my mother.?
The spics dump on us,
so we have to dump on them.
Everybody's dumping on everybody.
Even the humping is dumping..."
~Tony Manero (Saturday Night Fever)
I would like to see a similar chart showing net sales of US equities by Americans.
PPT doesn't count as American.
Once be get rid of the Obamaidiot, I think we'll be alright:)
I almost missed the sarcasm. Very subtle, but the smiley face gave you away.
"Americans Dump The World, As The World Dumps America"
Fuck the Americans who destroyed the world in one century!
Message to the aliens if they read this message: stay away if you don't want to have troubles with galactic freedom and universal democracy!
If aliens are capable of reaching earth, chances are their technology will render them safe from the stupidity of humans.
But we won't be safe from them. Who's going to come across the galaxy, or universe, to say hello? I hope you'd like being somealien's pet. You might need to get neutered, first, though.
A sells to B, B sells to A.
yep. same as it ever was. China is buying gold? good, perhaps the next ton of soybeans and pecans we sell them will be settled in gold. fine with me. Everyone needs to eat bitches.
China buys most of its soybeans from Brazil, and settles the trades in...yuan.
Society is and always has been the greatest practice in nihilism. That's the wonderful irony of it. I'm reluctant to say that it's masterful...but what else can I say of a system where people hold their irrelevant values as unwaivering when, in truth, their values and morality and lives mean nothing on operating level of the system.
Society is nihilism manifest. And I wouldn't call myself much of a nihilist so much as I see what the hell nihilism is and I see that we practice it in all the wrong ways.
Too right, we practice 'Trash nihilism'. I bet if Kropotkin were alive today he'd blow you a kiss.