TIC report for December 2009

The TIC reports has some damning news on Foreigners dumping U.S. Treasuries, especially China.

Firstly, what is the TIC? TIC stands for Treasury International Capital Data and it is a monthly report on who has bought and sold all stocks and bonds coming in and out of the country.

From the FAQ:

The Treasury International Capital (TIC) reporting system collects data for the United States on cross-border portfolio investment flows and positions between U.S. residents (including U.S.-based branches of firms headquartered in other countries) and foreign residents (including offshore branches of U.S. firms)

From this month's press release:

Foreign holdings of dollar-denominated short-term U.S. securities, including Treasury bills, and other custody liabilities decreased $67.7 billion. Foreign holdings of Treasury bills decreased $53.0 billion.

Who is dumping U.S. Treasuries? China. From the Foreign holders of U.S. Treasuries data:

  • China : -$34.2 Billion
  • Japan: +$10.5 Billion
  • U.K.: +$24.9 Billion
  • Hong Kong: +$6.7 Billion

What is even more interesting (at least for me, I haven't looked at this much), is the holdings of Caribbean Banking Centers What does this mean, the Cayman Islands where so many corporations are incorporated to avoid U.S. taxes? Anyway their holdings are $184.7 billion.

Another question is who is buying these up in the U.K.?

According to CBC, this is the largest monthly drop in foreign holdings of U.S. Treasuries.

The U.S. Treasury Department said foreign holdings of U.S. treasury certificates fell by $53 billion US, surpassing the previous record of a $44.5 billion US drop in April 2009.

So, it looks like China funding the U.S. debt credit card is over. Who funds it now? Why the Federal Reserve and their printing press.

China at one time held 50% of all U.S. Treasuries. With this months report, China mainland holdings are now down to 20.9%.

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Aha! U.K Treasury purchases probably.....China

Interesting and I wonder why and what the difference is, but according to EconomPic Data, China buys treasuries through the U.K....

ok, glad we've cleared that up and have yet another level of obfuscation to determine which nations, which foreign entities are buying up U.S. Treasuries (sic).

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