Japan tops China as largest holder of US Treasury debt

[艹艹艹]

http://abcnews.go.com/Business/wireStory/japan-tops-china-largest-holder-us-treasury-debt-44221645
Japan tops China as largest holder of US Treasury debt
WASHINGTON — Dec 15, 2016, 4:41 PM ET

WASHINGTON (AP) — Japan surpassed China in October as the largest foreign owner of U.S. Treasury securities, the first time the countries have swapped places in nearly two years. Total foreign holdings fell for a fourth month.

The Treasury Department says that total foreign holdings dropped 1.9 percent to $6.04 trillion in October. Foreign holdings of Treasury debt are down 3.9 percent from a recent peak of $6.28 billion set in March.

Both Japan and China cut their portfolios in October. But China's reduction was a larger 3.6 percent to $1.12 trillion. Japan trimmed its holdings by a smaller 0.4 percent, which meant its holdings of $1.13 trillion exceeded China's total.

It marked the first time that Japan has been No. 1 since early 2015. China has held the top spot for a number of years. The last time it was displaced was for one month in February 2015 when Japan, normally No. 2, moved into the top spot.

In October, Ireland was in the third spot in terms of total holdings with $271 billion in Treasury debt followed by the Cayman Islands, a Caribbean banking center, with $262 billion in Treasury debt.

Total federal government debt now stands at $19.8 trillion and is projected by the Congressional Budget Office to increase by $8.6 trillion over the next decade, underscoring America's need to keep attracting foreign investors.


© 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

 

[ahojunk]

That's good news for China.

They should reduce it further over the next few years.

Throw them the useless T-bills. You don't want to be left holding the empty can.

 

[Shotgunner51]

total foreign holdings dropped 1.9 percent to $6.04 trillion in October. Foreign holdings of Treasury debt are down 3.9 percent from a recent peak of $6.28 billion set in March.

Both Japan and China cut their portfolios in October. But China's reduction was a larger 3.6 percent to $1.12 trillion. Japan trimmed its holdings by a smaller 0.4 percent, which meant its holdings of $1.13 trillion exceeded China's total.

Yes, several foreign central banks have been unloading T-bills, this has been going on for quite some time.

For China, PBoC has been divesting from US treasury bills since October 2013, the process is gradual, started way before the Fed rate hike announced this Wednesday, or even way before last December. I'm not sure how much are embedded in Euroclear (Belgium) or Caribbean banking center, but I expect the unloading process of treasury bills from PBoC will just continue, while commodities reserves, sovereign welfare funds (SWF), will continue loading.

So who are absorbing these T-bills dumped into the market? My guess, US Fed, Cayman Island, Ireland, Belgium, Luxembourg, Bermuda.

https://www.treasury.gov/resource-center/data-chart-center/tic/Pages/ticsec2.aspx
http://ticdata.treasury.gov/Publish/mfh.txt

 

[Daniel808]

That's good news for China.

They should reduce it further over the next few years.

View attachment 360682

Throw them the useless T-bills. You don't want to be left holding the empty can.

Yes, several foreign central banks have been unloading T-bills, this has been going on for quite some time.

For China, PBoC has been divesting from US treasury bills since October 2013, the process is gradual, started way before the Fed rate hike announced this Wednesday, or even way before last December. I'm not sure how much are embedded in Euroclear (Belgium) or Caribbean banking center, but I expect the unloading process of treasury bills from PBoC will just continue, while commodities reserves, sovereign welfare funds (SWF), will continue loading.

https://www.treasury.gov/resource-center/data-chart-center/tic/Pages/ticsec2.aspx
http://ticdata.treasury.gov/Publish/mfh.txt​

So who are absorbing these T-bills dumped into the market? My guess, US Fed, Cayman Island, Ireland, Belgium, Luxembourg, Bermuda.

LOL
The funny thing, in Indonesia my Friend argue with me.
He said this is another Sign of China's Economic Slowdown, China's Economic is in BIG TROUBLE now.

 

[Shotgunner51]

LOL
The funny thing, in Indonesia my Friend argue with me.
He said this is another Sign of China's Economic Slowdown, China's Economic is in BIG TROUBLE now.

Well that's one standard MSM "feel good" narrative, for consumption by the China-hating mass public of the west. What MSM won't tell you: China is loading commodities strategic reserves, sovereign wealth funds, and acquiring/building assets across the globe.

 

[AndrewJin]

Well that's one standard MSM "feel good" narrative, for consumption by the China-hating mass public of the west. What MSM won't tell you: China is loading commodities strategic reserves, sovereign wealth funds, and acquiring/building assets across the globe.

Isn't it good?
MSM works like CPC's secret agents, providing a best environment.....
If they keep telling the truth, the public there will be in panic mode....

 

[samsara]

Major foreign holders of U.S. treasury securities 2016 | Statistic

Major foreign holders of U.S. treasury securities, as of AUGUST 2016 (in billion U.S. dollars)

This graph shows major foreign holders of US treasury debt as of August 2016. China held treasury securities totaling 1.19 trillion U.S. dollars.

Foreign holders of United States treasury debt

According to the Federal Reserve and U.S. Department of the Treasury, foreign countries held a total of 6.17 trillion U.S. dollars in U.S. treasury securities as of December 2015. Of the total 6.17 trillion held by foreign countries, Mainland China and Japan held the greatest portions. China held 1.25 trillion U.S. dollars in U.S. securities. Japan held 1.12 trillion U.S. dollars worth. Other foreign holders included oil exporting countries and Caribbean banking centers.

As of 2014, the United States had a total public national debt of 17.82 trillion U.S. dollars, an amount that rose rising steadily, particularly since 2008. The national debt rose from 10.02 trillion U.S. dollars in 2008 to 18.15 trillion U.S. dollars in 2015. Also as of 2014, the total interest expense on debt held by the public of the United States reached 260 billion U.S. dollars, while 173 billion U.S. dollars in interest expense were intragovernmental debt holdings. Total outlays of the U.S. government were 3.51 trillion U.S. dollars in 2014, the greatest amount spent by the government in over ten years. It was forecast that spending would reach 4.89 trillion U.S. dollars by 2020.

National debt burden is often measured as a percentage of total public debt to gross domestic product. In a list of selected countries, the United States did not fair as poorly as might be expected. In the U.S. total debt in 2011 amounted to 289 percent of the country’s gross domestic product, while government debt amounted to 80 percent of the country’s GDP.

 

[Shotgunner51]

This graph shows major foreign holders of US treasury debt as of August 2016. China held treasury securities totaling 1.19 trillion U.S. dollars.

Yes those are August 2016 data. In post #3, those are September 2016 data.
If we check earlier data, we can see China Mainland (aka PBoC) has begun unloading since October 2013.

Caribbean banking centers

Proxies or custodian accounts, several very small economies (and tax havens) are used by investors to cover their tracks. Check Cayman Island, Ireland, Bermuda, Belgium, Luxembourg.

As of 2014, the United States had a total public national debt of 17.82 trillion U.S. dollars, an amount that rose rising steadily, particularly since 2008. The national debt rose from 10.02 trillion U.S. dollars in 2008 to 18.15 trillion U.S. dollars in 2015. Also as of 2014, the total interest expense on debt held by the public of the United States reached 260 billion U.S. dollars, while 173 billion U.S. dollars in interest expense were intragovernmental debt holdings. Total outlays of the U.S. government were 3.51 trillion U.S. dollars in 2014, the greatest amount spent by the government in over ten years. It was forecast that spending would reach 4.89 trillion U.S. dollars by 2020.

Yes, by now it's close to $20 trillion. Future? With never-ending deficits the national debt only has one direction to go - "growth", forever till the end of time.

 

[Bussard Ramjet]

That's good news for China.

They should reduce it further over the next few years.

View attachment 360682

Throw them the useless T-bills. You don't want to be left holding the empty can.

Except there is no indication the money is going anywhere else productive.

Most of the money is being used to support RMB, which is under pressure due to huge capital outflows.

Yes, several foreign central banks have been unloading T-bills, this has been going on for quite some time.

For China, PBoC has been divesting from US treasury bills since October 2013, the process is gradual, started way before the Fed rate hike announced this Wednesday, or even way before last December. I'm not sure how much are embedded in Euroclear (Belgium) or Caribbean banking center, but I expect the unloading process of treasury bills from PBoC will just continue, while commodities reserves, sovereign welfare funds (SWF), will continue loading.

View attachment 360697

So who are absorbing these T-bills dumped into the market? My guess, US Fed, Cayman Island, Ireland, Belgium, Luxembourg, Bermuda.

https://www.treasury.gov/resource-center/data-chart-center/tic/Pages/ticsec2.aspx
http://ticdata.treasury.gov/Publish/mfh.txt

Except the data clearly shows that both commodities and SWF are not loading this cash. The cash is going to support RMB from capital outflows.

Well that's one standard MSM "feel good" narrative, for consumption by the China-hating mass public of the west. What MSM won't tell you: China is loading commodities strategic reserves, sovereign wealth funds, and acquiring/building assets across the globe.

China's ODI increase doesn't account for the HUGE downfall in reserves. Nor do commodities show that. Also, no major SWF has been introduced, and the current ones are functioning like before.

 

[AndrewJin]

OMG, a chemistry student from Mumbai is preaching a banker on finance.....
Are we living in the same universe?

 

[Shotgunner51]

capital outflows

China only became net capital exporter since last year, of course it suddenly becomes "capital outflow" rhetoric in western media, and this year already become world's largest, what's new? So when others - like Japan, Germany, Singapore, UAE - do the same, that's not "capital outflow"? What do they call it?

Want to see capital flows? Cut the crap and go straight to numbers, read this from SAFE, compare IIP details at end June 2016 with same time last year:

• China's NIIP actually grew by $181.5 billion, reaching $1.6636 trillion, further reinforcing China Mainland as 2nd largest creditor nation in the world.

• Go to details, on the asset side, ODI stock grew $228.8 billion. Portfolio, derivatives, cash deposit, trade credits, loans ALL EXPANDED. Only item reduced is reserve assets, reduce by $468.2 billion. Net reduction of PBoC assets is only $134.6 billion, which is about same amount as selling T-bills, so small that not even enough to add 10% to those fast expanding gigantic Sovereign Welfare Funds.

• On the liabilities side, as usual dominated by inbound FDI, which further grew by $162.3 billion in the year. Big reductions are portfolio ($191.4 billion), loan ($129.8 billion) and cash deposit ($122 billion), these largely help to reduce China liabilities by massive $316.1 billion.

• It also means inbound FDI stock ($2.9082 trillion by June 2016) represents 63% of all China liabilities, increase from 55% a year ago, while China ODI stock ($1.2515 trillion) is only 19.8% of assets! This pose a huge challenge for China to quickly increase ODI, reduce low-yield reserve assets, in order to balance or even beat investment deficit.

• Source: http://www.safe.gov.cn/wps/portal/!...j_tcb2_store/8281da80481829bb9221d284909d05cd

Also, no major SWF has been introduced

You didn't know China began gradually constructing first SWF only since 2007? You didn't know by now 4 known SWFs combined AUM at least over $1.5 trillion as per SWFI? Or US$1.667 trillion as per SovereignWealthCenter.com? That even exclude others like Silk Road Fund?

https://defence.pk/threads/new-pivo...orlds-largest-sovereign-welfare-funds.455072/

Nor do commodities show that.

You don't know China has been accelerating commodities imports since last year, from iron ore, coal, alumina, copper to crude oil, all at historical records? Say oil, 1.17 million bpd above consumption level, China has to keep scrambling for SPR storage spaces, you don't know?

https://defence.pk/threads/angola-becomes-china’s-largest-oil-supplier-as-beijing-stockpiles-record-amounts-of-crude.457700/#post-8848839

Most of the money is being used to support RMB

How does that work by the way, vaporize the cash in your hand?
More importantly, and funny, on one hand west accuse China (and five other creditor nations) of competitive devaluation, on the other hand put idiotic "support" narrative like this, can they make up their mind? So much self-contradicting crap, their brains suffer Dissociative Disorder or what?

https://defence.pk/threads/us-singl...special-monitoring.457610/page-3#post-8879059

 

[rott]

Excellent news!!!

 

[Shotgunner51]

Excellent news!!!

Be patient though. Check Sep 2016 data, China still holds $1,157 billion which means net sale of only $100 billion in 12 months （compared to $1,258 billion in Sep 2015), only $8+ billion unloaded per average month. Moreover, unknown amount of loading could be added with less politically sensitive proxy accounts (e.g. Belgium, Caribbean), that's untraceable.

Unloading gonna be a slow, long and delicate geo-political process.

 

[艹艹艹]

Trump's policy is not clear

 

[Shotgunner51]

Trump's policy is not clear

Trump or whatever, US is always the same country. The same bankers and their bank aka Fed, the same MIC and their tax regime aka Congress.

So don't dream about fiscal discipline, monetary discipline, these won't happen. The only thing destined to go on is debt, more debt, till the end of time.