Both China and Japan are selling treasuries for their own reasons. For China, they’re trying to fend off capital flight and desperately need to keep the accordion monkey placated with a neverending flow of fresh bananas. The Japanese have their own issues — stemming from decades of deflation and a population devoid of reproduction — seemingly obsessed with anime and fucking robots (literally).
Since the financial crisis, in an overt effort to transfer private losses to the public balance sheet, the Federal Reserve purchased record amount of treasuries, in an effort to rig markets, rates, and to avoid resetting the system.
Where did the Fed find the money to buy all of those treasuries?
They didn’t. They merely printed new money to purchase American debt obligations.
The net result of this Frankenstonian approach to economics is a stock market at record highs, the rich are richer than ever, and middle class America strewn out across the landscape — debilitated by rising healthcare, education and tax expenses.
The Fed now owns more treasuries than China and Japan combined.
Federal Reserve holdings of treasuries dwarf all others.
Liquidation.
China is getting out.
Source: Bloomberg
A monthly Treasury Department report released in Washington on Wednesday showed China held $1.05 trillion in U.S. government bonds, notes and bills in November, a drop of $66.4 billion from the prior month that was the steepest since December 2011. Japan’s portfolio decreased for fourth consecutive month, falling by $23.3 billion to $1.11 trillion, according to the data.
The People’s Bank of China, owner of the world’s biggest foreign-exchange reserves, has burned through a quarter of its war chest since 2014. U.S. Treasury data show the country has dumped about $270 billion of U.S. government debt since its holdings peaked at $1.32 trillion in 2013 and is using the funds to underpin the yuan and stem capital outflows.
“I’m not surprised since China’s reserves are shrinking — they are selling Treasuries to prevent the yuan from weakening too much,” said Priya Misra, the head of global rate strategy at TD Securities. “The foreign buyers of Treasuries have been foreign private investors — mostly Japanese lifers — but that flow also slowed down by year end due to the cost of hedging.”
Fuckery, largess.
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yey, it’s all coming home to roost.
P.T. Barnum is pissed his circus got cancelled
“They merely printed new money to purchase American debt obligations”…….yes indeed, and they always will which is why I remain on the ark. No way to shrink the balance sheet. Just no way. We can’t inflate our way out of a paper bag.
Once all countries on periphery implode, including Euro, the Fed will default – partial or full default. Nevertheless, the USD will be the last man standing at that point. Gold and silver bitches. And fuck bitcoin and all the other shitcoins.
You may be correct, which is why there is gold and silver on the ark. I speared all the fucking frogs, cut off their legs for the other guests to eat, and threw the carcasses overboard – so there’s plenty of room for the precious metals.
Your Ark and Gold will get poleaxed as long as the USD is the last man standing. USD is now bottoming and will turn right back up again, bringing TLT and Gold down as it makes its move.
Buying and holding for the end game is a boring strategy.
We all know how this ends. We’re all dead. I’d rather have fun and trade than buy and hold.
To each his own. I respect your opinion but you can’t get me off the ark. Trade away
Um, there were only 2 frogs on the Ark. You should have eaten the elephants… more room for storage.