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China Brings US Treasury Holdings To One Year Low, Russia Cuts Treasury Exposure By 50% In One Year
Today's TIC data confirmed what Zero Hedge readers have now known for quite some time: namely that foreigners are selling US paper. And while we have used contemporaneous Custody Account data from the Fed to present that in the past 7 weeks foreigners have sold a record amount of bonds, we now get confirmation via TIC that in November the selling continued, especially at the biggest non-Fed holder of US paper, China, which saw its holdings down to $1,132.6 billion, the lowest in the past year. Yet where the selling is just relentless is in Russia, which has quite demonstratively slashed its US Treasury holdings in half in the past year from $176 billion to under $80 billion. Putin is not happy, and is not afraid to show it.
China:
Russia:
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All the more for the Fed to buy. Where's the prob?
Snicker.
That Commie bastard! That waste of space country will be selling it's soul to stay together while our children will be taking the USA to new heights.
It is all in the geography... we have two oceans, lots of deep water ports, ample resources, and our military is the best in the world. They are basically land locked to the west, and have no infrastructure.
He may be able to ruff up the dollar in the short term, but he is digging his own grave by doing it.
Is MDB off today and you are pulling the slack for him? The world is full of zombies and I hate to break it to you but the USA is leading the pack.
welcome to the treasury endgame, bitchez
http://azizonomics.com/2011/12/15/the-great-treasury-dumping-game-continues/
OOOO! should we bee reeeaaally afriad?? I don't think so.
If China and Russia have sold some of our paper and the price hasn't moved, isn't that a good sign? Yes
Are Russia and China the economic geniuses of our time who have figured out how to fairly value US Treasury debt? I don't think so.
In sum, Russia and China selling our debt is probably the most bullish indicator that we have seen for a while for the US economy.
fuck! unload them faster and let's get this ball rolling
dirty float bitchez
Give me a break. Once Americans start saving and putting the squeeze on Chinese exports, the Chinese come back with their tails between their legs and ramp up their treasury holdings. If the world really thinks they can do without the hearty American consumer, they need to think again.
I agree, MDB knows EVERYTHING!
Saving? We don't need no stinking savings We are America Bennie prints it
bullshit
Save what? There is excess money in American's budgets? Even if there were, the discipline and act of savings has been on a 30+ year steady decline. Behavior is going to change overnight from consumption to savings? Maybe somewhat, where possible, but that is ignoring that the typical American household budget is impacted with all of the recent shocks (bubble burst, extra debt, under-/un-employment, etc.).
So, all of a sudden, the nation is going to save their "excess money" and change behaviors they've had for the majority of their lives. No doubt austerity is coming to the US (dramatically more than already) and that will impact everyone that sells to us. But, there will be no active "squeezing" of anyone as if it's our empowered plan or some other fantasy.
Once Americans start saving
LOL. Americans don't know shit about saving. They are too indoctrinated and/or dumb. Besides save what money? They are broke and buy everything on credit.
You forgot '/sarc'
Hey Cheif! How cool is your gig? Sitting at home getting paid by the CorpGov to post their propaganda on ZH between rounds of Modern Warfare.
Hey - woooo - easy on the MW3 talk there. As for the rest, proceed.
Sorry it took me over an hour to respond to you panty waste, but I had a cell phone to one ear and land line the to the other while returning emails.
The movers and shakers like me and MDB are trying to keep the world going and still make time to post her among the social retards.
Rickards refers to Russia something to the effect of a mineral resources extraction racket run by a mafia.
Regardless, they need US paper only to the extent it supports their racket.
Hey Chief! Go back to the fifties.
That was WAY before I was born. By your name I would guess you like it up the ass.
10y is at 1.87. Um, can anyone reconcile these numbers? UK and Japan buying?
Also, is there any way China can dump treasuries without screwing themselves?
1.87% with a real inflation rate of 7-12%?
Sounds like a deal to me.
(Post under review - Alien and Sedition Acts - U.S. Department of Homeland Security)
Before SOPA flies thru to protect their guilty asses, get DeSopa (for firefox) for starters ..
http://www.geek.com/articles/geek-pick/how-to-bypass-sopa-restrictions-2...
Me like the link to anti-sopa (workarounds) gigs!!!
The ending recieves both thumbs up: The saddest thing about all of this is that these solutions have been used before. While these workarounds will help you to bypass SOPA, they are the same methods that experts recommend for bypassing the national firewall in China.
God bless USA and China soped all over !!! and Hillary for promoting Internet freedom!!!
Bend over bitchez stile....
Five or ten years of this data would be helpful for context.
The Treasury is kind enough to revise it every year to make any long-term analysis impossible
Does "revise" mean "manipulate it to fit the current narrative"?
How dare you imply that! ;-)
Yeah, get in the truck, we've got a nice Summer Camp filled with educational opportunities for you!
Tyler, what % of Treasuries are the Fed buying on average each month right now?
What comes after 100%?
But Robo insists theyre buying like mad.
Maybe he means you'd have to be mad to buy them.
You can't expect him to give a good analysis on the day of his unbirthday party.
If you're happy and you know it sell US toilet paper.
If you're happy and you know it sell US toilet paper.
If your'e happy and you know and your gold and silver show it.
If you're happy and you know it sell US toilet paper.
I had a friend named: Richard D. Kaye.
His parents are funny.
I've heard that if the SHTF, stocks of TP are very good to have around. Especially since it looks like Sears catalogs will be in short supply....
The idiots are buying like mad. Just like the idiots bought stocks like mad in 2000 and real estate like mad in 2007.
He needs to put bread on the table, like the rest of us.
Y-Axis
Ohhh man! The € is in trouble boyeeeee!
"Across all OECD countries, public debt-to-GDP ratios now average 100%. This leaves them all vulnerable. At 5% interest, they have to devote one 20th of their output to servicing old debt. If they have tax revenues of 20% of GDP, it means that a quarter of their revenues must be used to cover the debt. If interest rates don’t rise, they can hold on. But if they are still running deficits larger than their growth rates, the situation is hopeless.
In America, for example, the deficit – in terms of GDP – is increasing at three times the rate of the economy beneath it.
Already, most of the big banks in Europe and America are probably insolvent. Without artificial support from the authorities they would probably be unable to survive a crisis. Trouble is, the authorities have no real support to give. Most of the nations of the developed world are insolvent too. They can shuffle along now… but could not survive a run on their bonds."
From The Daily Reckoning web site by Bill Bonner. He makes a good point.
Again I believe this is all a matter of improperly valued assets.
Gold, silver, land should all be 3x there current levels. Ass pirate lawyers, actors and public employees should have their incomes reduced by 1/2.
Engineers and technical specialist should have their incomes doubled.
The house of reps should be a part time gig, with very limited campaign funding.
And it would be helpful if we would really think about who we are electing as President. Dancing skills on the Lesbo Ellen show should not count as a qualification.
Ah an idealist. Yeap, and on paper communism also sounds like the most compassionate system .
The human part of the equation always screws it up. It is not that We have greedy people, it is that the field is unfair. If you make it there is always somebody telling you that your income should be reduced by 1/2. Bring them ALL down, it is not fair. Let's all be equal. /sarc
in reference to your avatar.
costa concordia had 13 decks all given names of European countries.
It's drowning. Talking about synchronicity!
what will we do when there is no one left to buy our toilet paper?
Use it to warm the fire place.
Intrinsic Value = BTU's
I recommend gasification technology for maximum efficiency...
Finally cover these damn shorts.
we are going to store it at the FED
don't worry, the Fed wants it all. After all, there's so much monitizing and so little time.
Thank God the "US Households" can take-up the slack...
This is the big breaking story I've been waiting for. Peru and Poland are lending us $100-$150 billion a month? The real number must be much higher given empoyment and cpi numbers and the wars and other things being off the books. It almost has to be the main heroin dealer in Afghanistan. If the main heroin dealer is in Afghanistan and making $4 trillion a year, he could probably be paying our debt.
I read these posts and I ask who is buying? If it is the fed why is the balance sheet not exploding?
Have a read of this, and marvel at the impending catastrophe our 'Leaders' have wrought in their attempt to create fake demand for US Treasuries.
http://www.marketoracle.co.uk/Article32610.html
To answer your question regarding the Fed's balance sheet not exploding - you're looking in the wrong place.
What is, in fact, exploding is the derivative books of the TBTF banks where all the fake demand for these UST is coming from. For example, in just the first half of 2011, Morgan Stanley just happened to grow their swap book from 27.2 Trillion to 35.2 Trillion in notional – for a cool increase of 8 Trillion in six months at one investment bank.
Interesting thanks.
Not only have the derivatives been exploding(the same thing that caused the 2008 crisis that Dodd Frank was suppossed to fix) but, what nuclear financial catastrophy has to happen to trigger an actual payout of these things as europe has shown us. DEAD MONEY. Thanks again Blythe Masters for such a wonderful inovative product. Between this and your silver shorts you are a real piece of work. You have been more responsible for the disaster the markets have become since Slick willie and Graham/Leach removed Glass Steagal and raided the SSI money to announce a balanced budget.
Balance sheet has in fact been exploding and has been touted by "officials" to be bullish for the dollar. See?!?! WE ARE ALL FUCKING SAVED!!!!!!
with all this selling and the deficit spending that continues to go on, how could operation twist being fully fund the hole? mathmatically it doesnt seem plausible that a stealth QE3 hasnt been happening and the Fed has it under wraps.
just saying......
With all this selling, one has to wonder why USGB's are so high.
Monetization is happening somehow or it will soon. For now it could be the twist operation. Hover, once that program runs its course (fully twisted), then outright printing will be the only answer possible. We are not growing our way out of this mess. Therefore, tax revenue is not going to increase any time soon without inflation.
Anyone have any idea what they are doing with the money.....GOLD!
The reason they have less treasuries is because they have been bleeding reserves.. to answer your question, they are not doing anythign with the money because capital is leaving both Russia and China
The Fed will continue to buy ALL debt.
I´m 3x short 10 y since october
Ouch! Lube helps...take it from someone that went short 10Y last summer.
Uh oh.
Why the hell would you short something where the other party has everything to lose, yet can keep the ball in the air at the press of a button.
Yes it's senseless that people still take ponzibucks, but thats just the reality, even better that the ROW are willing to do actual WORK for those ponzibucks, so why the heck would they stop printing it?
Until the major reserve pools, asset pools and trading venues have redenominated the ponzibuck will continue the buttrape.
Yields could rise when/if QE3 gets pre-announced, just like they did after QE1 and QE2 were announced.
Short term trade only, bec. you're right in that rates won't be permitted to rise too much, else the Ponzi collapses.
Layman's question here, If these two are reducing (selling?) their holding who in the hell is buying it? No private party has this kind of heat sink, so it must be a govt entity. Have we coerced an "ally" into doing it or is it our own Fed. How can the Fed camoflauge it?
It makes my head spin to think that this is just some sort of F upped feedback loop. Is it just a case of mega-sized check-kiting?
BFD! 176 Billion to 80 Billion? The US borrows that much in a month. When China cuts their holdings in half then I will start paying attention.
OT FYI: PNC's profit was down 40% YoY
Syria?
Surprisingly, the Russians practically gave the West a green light on Syrian 'humanitarian' intervention:
"If someone conceives the idea of using force at any cost — and I’ve already heard calls for sending some Arab troops to Syria — we are unlikely to be able to prevent this,” Mr. Lavrov said. “But this should be done on their own initiative and should remain on their conscience. They won’t get any authorization from the Security Council.” [Lavrov]
http://www.nytimes.com/2012/01/19/world/europe/russia-warns-against-supp...
You will see this trifecta alot more in the future..the Japan/ UK/ USA buying each others debt....smoke and mirrors....none of these countries have extra cash flow to invest...stong economies for that cash flow to occur...lol...its our bank helping their bank helping the other bank.....what a joke
Makes sense - if you're going to go to war over your pal Iran and Syria, you don't want to be holding the enemy countries debt now do you... ;-)
Well, Ts are expensive right now. Great time to sell for countries needing to use their reserves of fat... like Russia.
Massive flows out of euro assets into USD assets seems the dominant theme.
We've got a lot more debt to sell too. Does anybody know anyone who wants to get a .001% yeild on their money in a currency that's depreciating at a rate of about 5% annual? If so please contact Tim Geithner for this patriotic investment opportunity. Hurry before the entire American public is forced to buy it all through their 401k's. You too can convert irredemible paper money into irredemible paper debt but this opportunity won't last forever and the nation needs the extra loot now to conduct war games with Israel and then to go on and invade Iran and steal their shit. Call now before the Ponzi system Collapses. If we can invade enough countries their won't be an alternative to our fascist hegemony and we won't have to admit collapse before the police/prison state. Please hurry patriots. Your country needs you. We gladly take gold, silver, and platinum as well.
Does the debt ceiling prevent the FED buyng more Treasuries?
Who bought the selloffs by China and Russia?
Could China be buying Euro bonds with the proceeds?
My biggest concern is what happens when they (China, Russia) hold zero US treasury debt?
That is when they will introduce the new gold standard I think....
I want to know why US treasuries are a good deal????? They pay nothing for ten years...and I think you will lose money.....its JUST a Safehaven trade????? I think its a Central Bank trade...they care not if they make a return....that is what has screwed up this "market"...there is no price descovery when the Central Banks are buying when they have to reduce the interest rates.....what do you think the real interest rates should be if the Cental banks were out of the buying????? I think alot higher...
I had a pile in US treasuries (short and long). But it was giving me an ulcer. Sleeping better was a better exchange, and the monster printing police state couldn't care less.
Of course it's a central bank trade. Who else would buy a very low interest bond from a country determined to devalue its currency over the life of the bond? Not sure how high the interest rates would have to go as the capacity to absorb all of the American, Japanese and European debt has to be questioned if no central banks were involved. The rollover requirements plus the massive ongoing deficits should cause rates a lot higher than they are today with central planning intervention.
Huh? We borrow that much EVERY month...it's a drop in the bucket. We'll POMO more than that in short order.
And the SCoaMF in the WH wants his credit limit raised.
Perfect timing, eh?
&%$#!!!
typical BS..
russian's reserves are about 500 bln in $$
see http://cbr.ru/eng/hd_base/mrrf/?C_mes=01&C_year=2011&To_mes=01&To_year=2...
usually russians kept money in $/euro 50:40 ratio, rest of in yen/pounds/gold/etc
so question if its not USA debt, then what country? Brazil ? N korea?
please know facts before publishing shit
alx
Where exactly does that link reveal the actual currency basket?
You are right it dosn't...I think he was slightly lost in translation.
you're either retarded or from USA. seems you know nothing about google.
here's link : http://www.cbr.ru/hd_base/BiCurBacket.asp
hope you know how to use google traslation services cause I'm sure you know shit about foreign languages / countries..
good luck
alx
Broken link.
You neglected to mention that the total foreign holdings of US debt hit an all-time high of $4.751 trillion in November, up 7.7% YOY and up 1.7% from October. Japan has been buying like crazy since August (up 13.6%).
Anyone who wants the real statistics follow the link in the post to look at the TIC data yourself.
Tyler,
Can you show us who is buying it..??
I was going to ask this question too. (Also a native Texan).
If there was so much selling of UST, shouldn't there be a relationship to the yield at some point? Are aftermarket UST yields related to POMO yields?
You would think that at some point all the selling would find fewer and fewer buyers thus making them more toxic to hold (like Greece debt.) Are the buyers getting these instruments at a discount or premium? Seems like if dumping is going on, discounts would be increasing.
(These musings come from an engineer, not an economist, so forgive and educate my ignorance. Thanks!)
It sounds like these countries are doing the right thing.
Good for them.
Careful. Letting a bond mature and getting your investment back (and not reinvesting the principal) is *NOT* selling. I see people confusing this all the time.
That was my thought. China is down only $40B out of the $1.1T they hold. Could just be maturing, as you said.
Good point. We don't really know which it is, or what combination. However, during a time of high issuance, the change, or lack of it in the case of China, is telling.
So what happens with the debt ceiling not being raised? Anyway, Robo's comments are tongue in cheek I think. Hedge fund managers don't get big fees for buying Treasuries. If they are buying them, they will soon be selling as soon as one market or another actually commits to a direction that can be chased.
I found the list of buyers- (in no particular order)
the central bank of Mordor
the finical consortium of multidimensional beings
www.Atlantis.gov
the galactic empire (via Sith investments inc)
the bank of Val Halla
the Greys galactic capital investment
mount Olympus inc.
the central bank of Romulus
the central bank of Krypton
the Locust horde
the Union of Martian Tri- pod builders pension fund
Underverse investments and Necromonger holdings
the sovereign state of Timbuktu
the United Federation of Planets
Umbrella corp.
and of course, The Bank of Evil (formerly known as Lehman Bros.)(watch Despicable Me if you haven't already, it worth it just for this reference alone)
...so as you can see we are good for quite some time, we don't need no stinking commies to buy our debt.
ok so who is buying the crap?
China has lost reserves last quarter for the first time in a decade. So of course their Treasury holdings will diminish because they have less dollars. Interestingly enough China reserves are down 65bn since July and their Treasury holdings are down $41bn. With capital flight out of Emerging Markets of course EM central banks will end up with less treasuries because they end up with less USD
Deleted due content restricton by SOPA (Department of National Security)
Russia probably has an analogue of LTCM which was speculating on US bonds and has now gone bust
It is just Technical difficulties. The auction is just fine. Please hold.
Those graphs are textbook examples of "How to Lie (or Deceive) Using Statistics." Graphing just the top portion of the data happens a lot of ZH. I get it though--ZH is grabbing eyeballs and it knows many ZH readers appreciate the illusion because it feeds their desire for "System Failing" news. Hmmm, sounds sort of Fox-newsy.
WTF... a 50% drop... nothing "illusionary" about that. I would say that is "note worthy", graph or not! Russia not selling us any more oil? Has the trade "surplus" decreased? So just what is up with the reasons for this sell off? I think you missed the point of ZH bringing it to "our" attention.
China cutting numerous, albeit still small, direct trade deals with various countries that bypass the dollar. Japan, Russia, Iran and other countries doing the same. More deals in the works. Various countries that in the past have been significant buyers of US gov't debt in the past stating that they want more "diversification" for their sovereign wealth funds. All coming at a time when the US is issuing massive levels of debt, with no end in sight. What started out as a trickle seems to be growing. It's the trend over time, it's growing, and it's certainly not a vote of confidence in the US.
Yes, things tend to be sensationalized more than a bit at times. But if that helps folks look at the information, particularly over time, they will learn something useful.
Despite the reduced about of treasury holdings by China and Russia, the 10yr treasury yiedls continues to be headed lower as demand remains for the safe-haven. http://www.marketoverflow.com/2012/01/market-report-1-18-2012/
Ben's printing will get more vigorous as China dumps more Treasuries...someone has to buy this stuff, right?
Sorry Charley,
China and The US have been attached at the hip since 1970's & Nixon-Nomics. They're all part of the same fraternity, or did the Bof China being co-owner in the FED system not tip you off to that arrangement?
http://news.goldseek.com/GoldSeek/1326469500.php Some have asked WHO is buying our debt. This is how they keep the ponzi going. "us dollar centric derivitives complex:progenitor of parasitic, ponzi price fixing"