Skip to comments.Foreigners Sell A Record Amount, Over $100 Billion, Of Treasurys Held By The Fed In Past Week
Posted on 03/14/2014 7:20:53 AM PDT by Errant
A month ago we reported that according to much delayed TIC data, China had just dumped the second-largest amount of US Treasurys in history. The problem, of course, with this data is that it is stale and very backward looking. For a much better, and up to date, indicator of what foreigners are doing with US Treasurys in near real time, the bond watchers keep track of a less known data series, called "Treasury Securities Held in Custody for Foreign Official and International Accounts" which as the name implies shows what foreigners are doing with their Treasury securities held in custody by the Fed on a weekly basis. So here it goes: in the just reported latest data, for the week ended March 12, Treasurys
(Excerpt) Read more at zerohedge.com ...
They’re dumping to show the U.S. who’s boss in Ukraine following Kerry’s limp-wristed threats of economic warfare against Russia.
Yep, shot across the bow...
I just read this on ZH. Its good you posted it.
Too bad we can’t get the foreign ownership stats on a real time basis. This would be fascinating to watch over the next week. Might see a lot of dumping, which of course would have significant implications for our own interest rates.
Testing a potential weapon?
If the US goes ahead with some form of sanctions next week, you can count on it, IMO.
Is whom was selling as important as whom was buying? I wonder who bought them, the FED?
That’s what I’m thinking. Better a snake that rattles than one which strikes without warning.
No worries. Dear leader will direct ERISA to regulate that all retirement plans must invest in treasuries ( for the people’s security of course).
So who bought??? Treasury cranking up the printing presses? Fed expanding the balance sheet?
Getting out of treasuries before the coming Crash of ‘14........................
Today’s mid morning briefing:
E.T.: Ah, where are my golf clubs.
Aide: Right here Mr. President.
E.T.: Ah, what does Yellen want?
Aide: Serious problem with the Treasury Holding by Foreign Governments.
E.T.: Just electrons, nothing to worry about, call Andrews, tell em warm up AF1, I have a T Time for 9AM but don’t tell anyone else, just call it being in discussions with world leaders.
Aide: Yes Your Excellency.
E.T.: Anything else of interest.
Aide: Yes, Kerry is on hold from London, the UN General Secretary is also holding, Someone from NASA says he has an urgent matter about some nearby asteroid and...
E.T.: enough, put my call through to Beyonce and tell her we need a white house concert soon, like next week. Meanwhile, out of the way.
Aide: Yes sir, sorry to bother you with these trivialities.
And into what? I see it ALL coming down. Equities won't exactly be a safe haven.
Excellent question. Last December, Belgium (read: Europe) took up the slack when China and Japan stopped buying. Check out this story from Zero Hedge:
Regardless of who comes to the rescue, one thing we know for sure is that the Fed is the buyer of last resort.
Not directly; they have buyers/banksters that do the dirty deed for them, me thinks.
China and Russia are dumping US bonds, and Soros is making money on this in some way too.
When we devalue our dollar the folks who buy our Treasuries get a guaranteed loss. Until recently safety was a good trade-off... seems that perception has changed.
a)if the rates climb, the Fed will step in to buy the bonds, pushing rates down.
b)If the rates climb, the value of the bonds will fall and the foreigners will lose too much, which will also moderate the sell-off.
c) The increase in dollar reserves will also tend to drive down interest rates on dollars.
What will happen is that the dollar will fall more relative to the Euro, Yen and Yuan: look for gas prices and other commodity prices denominated in dollars to go up, as foreigners look to recoup their FX losses from the Fed's inflationary policies.
And into what? .....................
Hold on to your butts.
Your response makes no sense. I said there would be significant implications for our own interest rates. You said “wrong” but then acknowledge twice that rates could climb. Very confusing. If you are confident that rates will fall, then you should put your money on it (go short).
I didn't say they would fall, just that they would not rise (at least not anytime soon).
A smart bond trader could probably make some money on intraday futures trades, but that's about it. I just don't think the Fed will allow the market to move very much at all.
If the sell off continues, you could make money on FX, I would think, because some of the growing dollar reserves would need to be rolled over into local currencies.
I had not idea what your reply would be, but that made me laugh. Not a bad idea either, but the government(s) will eventually grab that too if SHTF. For the greater good, dontcha know.