Foreigners Sell Record $85 Billion In Treasurys In 6 Consecutive Weeks - Time To Get Concerned?

Tyler Durden's picture

Last week, when we pointed out what was then a record $77 billion in Treasury sales from the Fed's custody account, in addition to noting the patently obvious, namely that contrary to what one hears in the media, foreigners are offloading US paper hand over first, there was this little tidbit: "The question is what they are converting the USD into, and how much longer will the go on for: the last thing the US can afford is a wholesale dumping of its Treasurys. Because as the chart below vividly demonstrates, the traditional diagonal rise in foreign holdings of US paper has not only pleateaued, but it is in fact declining: a first in the history of the post-globalization world." Well as of today's H.4.1 update, the outflow has increased by yet another $8 billion to a new all time record of $85 billion, in 6 consecutive weeks, which is also tied for the longest consecutive period of outflows from the Fed's Custody account ever. This week's sale brings the total notional of Treasurys in the Custody account to just $2.66 trillion (down from a record $2.75 trillion) and the same as April of last year. And since the sellers are countries who have traditionally constantly recycled their trade surplus into US paper, this is quite a distrubing development. So while the elephant in the room could have been ignored 4, 3 and 2 weeks ago, it is getting increasingly more difficult to do so at this point, especially with US bond auctions mysteriously pricing at record low yields month after month. But at least the mass dump in Treasurys explains the $100 swing higher in gold in the past month.

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King_of_simpletons's picture

Not a time to be concerned. It is that time of great hope and bullishness. Just keep the positive message spreading thro' the airwaves.  May be the universe will respond by the power of affirmation. In the meantime, on earth, let's dig a deeper grave.

The Monkey's picture

Treasuries. Very bullish sentiment in the stock markets nearing extremes. Electoral cycle will require plans for fiscal consolidation, either via cuts, taxes or both. Bill Gross bitches about 30 year auction.

Sounds like we're nearing the end of a consolidation pattern and getting ready for another bull leg in treasuries.

Clockwork Orange's picture

Whenever the US Treasury needs to raise $$, or anything occurs similar to what the above article indicates, WHOOOSH !!!!, problems elsewhere and VOILA!!! assets into UST.

Pad the airwaves with bullish spirits, then smack the bejesus out of stocks (see last August after Banana Ben indicated he would stop counterfeiting for ... wait for it ... yup, 2 months) and HEY!!!! waddayakno? a whole lot of UST customers!!!!

Simple formula, just need a few sociopathic deuchebags to repeat the pattern.

If you are skeptical, just watch for a few weeks.  Rally into middle of next week should let the big money take off their option plays, then WHAMMO, exactly per the above.

Watch for now.  Then, sign up to help operate the gallows.

cocoablini's picture

There is a liquidity squeeze, so they are dumping liquid but supported treasuries for cash- as in senior currency dollars. Europe is shuffling trash dollars around trying to stay afloat with the Bernanke window open. We have seen this before where the Fed opens up the window to euro banks to take care of their carry trade nonsense. Ben sells dollars high and then prints and buys them back cheap- idiots who levered up have no choice in a meltdown. Then when everyone goes into dollar-straight- to zero mania, Ben collects them or prints more and more. Then , mathematics take over as inevitable deflationary deleveraging and insolvency create a run for the dollar and drive prices back up. Fed has stronger dollars in the cycle, sells, loans strong US dollar to levered idiots. Rinse repeat as dollar crashes and flashes . Fed is playing self-induced volatility, thanks to their sociopathic upbringing.

The Monkey's picture

Ben hasn't been buying them back cheap recently. The duration swap has had the Fed buying 30 years @ 280 bps. If they monetize buying shorter term US agencies (mortgages) without supporting the long-end, Bernanke might as well tie himself a noose.

Thank God for the electoral cycle. We still have that.

JTBfromtheWL's picture

Am bullish pm! Am diversified in various forms of coinage. The msms going to be reporting on the bright side of this collapse-the amazing investment fortunes to be had with gold and silver. The sheeple everywhere will have a newfound proudness for their wedding jewelry, flaunting it in a show of wealth! When I'm offered a touch in exchange for a guinea pig I'll turn the tables!

Braverdave's picture

Better yet is a breeding pair of guinea pigs.

... and I like shiny stuff too.

JTBfromtheWL's picture

Lots of people eat guinea pigs in SA. The females can breed within a couple months of age, have littlers of 4-5 and do that about 5 times a year usually. And they can live off grass! Similar to rabbits! Bacon anyone? Seriously though, I'd eat em' rather than starve.

Braverdave's picture

Yah! My grandmother spent some time in SA in her younger years and ate a guinea pig or two. My grandfather has told me stories about eating squirells, rabbits and such in ww2 years in europe.

Quail are abundant where I live. My dogs are quick enough to catch them sometimes too.

Sassy4205's picture

Doh, not guinea pigs...they are friends around our home.  ;-)  However, I guess if you're really hungry, even your neighbor will look delectable.  Bugs, worms and those kinds of critters look even less delicious.  We've gone the chicken route...they are natural foragers and fairly quick reproducers and give us wholesome protein daily in the form of eggs.  Rabbits are next on our agenda...meatier than guinea pigs and can be mated many times each year, though very low in fat content, which is necessary.  Their offspring can be eaten in 8 weeks.  My grandfather was a hunter and used to feed us all kinds of cuisine and tell us it was chicken (even those itty bitty drumsticks grampa?).  I wouldn't suggest relying on hunting when all this comes down because that will be on everyone's mind and the animal population will be depleted quickly.  Animal husbandry of whatever floats your boat, gardening and especially foraging will be the best options.  Did you know you can boil cattails and eat them like a corn dog?  LOL!  Survival will be in becoming very knowledgable, in advance, about your surroundings...what you can eat and what you can't.  Good luck to us all!

Teamtc321's picture

"And they can live off grass!"

Ding ding. We have a winner. Do what JR Simplot did when he started his Ag empire, slaughtered wild horses and fed to his hog's for free food. Meat work's also, who would have thought. 

Silver Bug's picture

The time to get concerned was years ago, but it is better late than never.

The Monkey's picture

I'm looking to buy silver, but it's still a ways from my "buy" price target: $3.00 / oz.

Harlequin001's picture

I've got some silver you can buy for $3.00, very good quality, much cheapness...

Of course, it's a bit heavy...

lincolnsteffens's picture

Funniest thing I've heard for days!! sad thing is I vividly remember $3/0z.  Bought a car thanks to the Hunt Bros.

Sold just as the market was getting massively over supplied. I didn't know diddly then except what a good profit looks like.

Freddie's picture

Hope & Change.

(post flagged by DHS)


Randall Cabot's picture

They're very good at ignoring elephants, very, very good.

Calmyourself's picture

hope & changey with a trunk eating peanuts...

rosiescenario's picture

When are they going to permit the Palestinians to open casinos?

HarryM's picture

Native Americans IN USA run Casinos

lolmao500's picture

I get it now... I failed with that one.

Jendrzejczyk's picture

When they have killed enough of them to start feeling guilty about it.

xela2200's picture

They have been killing them for 2000 years now. When do you think that they will start to feel guilty?

RockyRacoon's picture

When they start taking scalps.

GMadScientist's picture

When the Nakba has moved them all to Vegas ("what?! who could tell the difference?" - Mortie).

pakled's picture

Romney, Gingrich and Santorum : we will make porn illegal


Allright. That's the last straw. And to think I was going to vote for them.... 



xela2200's picture

Define porn. The only reason I have internet is because of it.

Calmyourself's picture

I picked the one I care about and checked it out and thinking is not your strong suit is it?  Not one of them said they would outlaw porn moron, they said they would enforce existing law your own links call you a liar, MAJOR FAIL.... GO AWAY..

lolmao500's picture

Federal obscenity laws should be vigorously enforced. If elected President, I will appoint an Attorney General who will do so.”

Patrick Trueman, MIM’s President and a former Department of Justice official in the Reagan and Bush I administrations, said that “our nation is suffering a pandemic of harm from pornography that is readily available,” and that “pornography is a common cause of the destruction of marriage. It leads to misogyny and violence against women and is a contributing factor in sexual trafficking.”

Aka porn is bad and we must restrict it! You betcha those fucking control freaks are gonna use SOPA and that kind of stuff to shutdown porn websites.

DeltaDawn's picture

Shoot your own staring you and any woman you can get in real life. Problem solved

uno's picture

fortunately the Caribbean island Ponzi will buy everything

ninja247's picture

QE3/inflation is coming, invest accoridngly .

The Monkey's picture

QE3, 4, 5, etc are coming, but no politically viable open market purchase plan will sustain or accelerate anything more than transitory inflation.

Looking forard to the Fed hitting the gas again. One more step toward demise of the institution.

xela2200's picture

Target Nominal Gross Domestic Product. How is that for a mouth full?

swani's picture

I have been worried for a very long time. 

Westcoastliberal's picture

Me too Swani.  We are sooooo screwed.

goldencrumbs's picture

Don't worry, these guys see things WAY before it's time to get concerned.

The transcripts of the Fed’s Open Market Committee meetings in 2006, released after a standard five-year delay, suggest that some of the nation’s pre-eminent economic policy makers did not fully understand the basic mechanics of the economy that they were charged with supervising. The problem was not a lack of information; it was a lack of comprehension, born in part of their deep confidence in models that turned out to be broken


Yes_Questions's picture



Ripley: How many drops for you is this, lieutenant?
Gorman: Thirty-eight. Simulated.
Vasquez: How many combat drops?
Gorman: Uh, two. Including this one.
Hudson: Oh-ho, man...
lolmao500's picture

Nuke it from orbit, it's the only way to be sure.

jonjon831983's picture

Hey, maybe you haven't been keeping up with current events, but we just got our asses kicked pal!!!

Freddie's picture

LOL!  So many good lines in that film even though James Cameron is a doche.   Paul Reiser's slimy character reminds me of the squid - Lloyd Blankfein and Goldman Scum.

I still prefer Ridley's original.

Braverdave's picture

They mostly come at night. Mostly.

Tyranny is Love's picture

There's no such thing as monsters...

geekgrrl's picture

"You know Burke, I don't know which species is worse. You don't see them fucking each other over for a goddamn percentage."

Oliver Jones's picture

That line is nothing short of prophetic.