Posted on 03/17/2017 10:21:09 AM PDT by Lorianne
After December's brief dead cat bounce, in which foreign central banks bought $18.6 billion in US Treasuries, breaking a streak of 12 consecutive months of selling, in January they resumed their liquidation. According to the just released TIC data, foreign official institutions, which includes mostly central banks, but also sovereign wealth funds and various other official entities, sold another $44.9 billion in Treasuries, in line with the aggressive selling seen for most of 2016.
Curiously, the sales by foreign central banks were largely offset by purchases by private holders, mostly corporate institutions and foreign retail investors, who bought $37.9 billion in the month, the most since last March when they acquired $41 billion. Combining the two, foreigners sold a total of $7 billion in TSYs in January.
Additionally, on an LTM basis, due to greater sales last January when they sold $57.2 billion or $12.3 billion than in the most recent period, the 12 month total rose from $338 billion in liquidations to $325.7 billion, the highest since last May.
(Excerpt) Read more at zerohedge.com ...
Okay. So what?
They are intervening to prop up their currency that otherwise would be weakening much faster than it is.
What does this mean? And why should we care?
“Curiously, the sales by foreign central banks were largely offset by purchases”.
Captain Obvious.
What was the rate on the bonds the Chinese sold? The Fed just raised rates, so it’s possible the ChiComs lost money on this.
I swear I’ve seen this article multiple times at ZH for years, along with a lot of others.
They must just change the dates and reprint.
Since you can’t do anything about it, nothing. However, since all of your 401Ks and retirement funds are invested in dollars and they are getting out of dollars, you could be affected in a major way. It is no accident that they want to get out of dollars since they have been the largest holder of them and it looks like we are about to get in a pissing match with them. I am always concerned when major manipulations occur in the financial markets and I have absolutely no control over them.
My take - interest rates are headed up so the treasuries are dropping in face value and they want to cut their losses.
Lets them eat the money or float their economy.
1) These foreign countries are defending their currency furiously. Expect the USD to rise if they stop defending it
2) Foreign governments are losing faith in US ability to repay its debt
#1 is far more likely.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.