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Foreign Treasury Holders – What is China Doing Now?

November 23, 2009 2:20 pm

TIC Data and the U.S. Current Account Deficit: Foreign Investors Still Buying Treasuries

That is what it looks like. With all of the huffing and hooting by Brazil, Russia, India and China, we are still seeing inflows. That’s important because someone has to foot the bill for all of the money that is being spent on bailing out the sinking ship know as the U.S. Economy.

How we will continue with a policy of a weak dollar and at the same time believe that there will be an insatiable appetite for our debt is hard to grasp. It does look like China is starting to get the hint as they are slowing purchases and India is buying up gold.

RGE Monitor:

Net foreign inflows to the U.S. (including short- and long-term flows and bank deposits of foreigners) were positive US$113.7 billion in September 2009 (from US$25 billion in August), as foreign purchases of long-term U.S. securities offset a decline in short-term assets like treasury bills. Purchases of long-term securities increased to US$55.7 billion (from US$37.5 billion in August) with private investors accounting for US$44.8 billion, and foreign official institutions (central banks) accounting for US$10.9 billion.

The net long-term inflows were well above the level the U.S. needs to finance its deficit. Foreign holdings of short-term debt (less than one year to maturity) fell by US$11.8 billion in September as investors continued to sell off some of the record purchases of short-term debt acquired since the Lehman bankruptcy. (U.S. Department of Treasury)

Treasury TrendsChina is still a BIG holder and will surely continue as their reserves dictate.

Foreign Treasury Holders

China is slowing the purchase of U.S. Treasuries.  Could this be a sign that they will no longer peg their currency against the dollar?

China TIC

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Written by Kevin Hoffmann · Category(s) Economy, Markets    |  Tags:   

2 Responses to “Foreign Treasury Holders – What is China Doing Now?”

  1. nomadwolf on November 24th, 2009 5:40 am

    Great charts, but why don't the numbers match up between the 3?
    1st chart has China's holdings around $600B, 2nd at $800B, and the 3rd at $180B.

  2. Kevin_Hoffmann on November 24th, 2009 3:59 pm

    Sorry about that. We made it easier to see the scale on the first chart so that you can see that it matches up. The previous version had the axis labels on the left. When you slide them to the right, it is much easier to see the data matches with the pie chart. However, on the third chart, you are correct, it did not match up. We have corrected so it is now referring to the proper data.

    Thanks for the heads up. The data has been corrected.

    As an exact number China holds 798.9 Billion of Treasuries as of 9/30/2009.

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