Japan Surpasses China as US' Biggest Creditor

Tuesday, February 16, 2010 , , , 2 Comments

Dear US:
the money machine, ur doin it wrong

I've said it before and I will say it again: foreign central banks, LOL!

Anyway, here's the story, I suppose, and it's no wonder Japan has been in a 20 year slump (or whatever, you go check those numbers yourself if I'm off), it must have something to do with their less than wise investment strategies. Case in point, loading up on T-bills. With all due respect to the Japanese, are you people out of your fucking minds?!


Japan overtook China to become the world's biggest foreign holder of U.S. Treasury debt in December, reclaiming the mantle for the first time in more than a year, according to Treasury Department data released Tuesday.

China shed more than $34 billion in long-and-short-term Treasury debt in December, while Japan added $11.5 billion, according to the monthly Treasury International Capital report, known as TIC. That left Japan's Treasury holdings at $768.8 billion and China's at $755.4 billion, the first time since September 2008 that Japan has owned more U.S. government debt than China.

The purchasing behavior of China has been troubling to some analysts and potentially to a U.S. government that is seeking to borrow a record amount this fiscal year. The latest shift would seem to reinforce market worries that China is tiring of its role as a key creditor to the U.S. amid rising budget deficits and tensions between Beijing and Washington.

However, the data don't cover the last six weeks of worries about some heavily indebted European countries, which might have encouraged China to retreat to the relative safety of U.S. debt. And other foreign buyers are so far making up for any flagging Chinese appetite for longer-dated Treasurys.

All foreign buyers, including private investors and foreign central banks, bought a net $69.9 billion in long-term Treasurys in December, according to the monthly report.

Remember, the Fed is planning on holding onto a lot of its short-term Treasury debt, which means there's going to need to be a refi at some point, and there's always the threat of China unloading all that crap.

Really with this shit?! Wait until China ACTUALLY sits out an entire auction and then come crying to me about worries over the "safety" of US debt. Until then, they don't have the balls to pull the trigger and the Treasury doesn't have the balls to say no more debt.


Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.


W.C. Varones said...

China's done, methinks.

Gold, Aussie dollars, real estate, equities... anything but Timmy debt with a Zimbabwe Ben devalution.

Really, WCV? I just assumed it was Japan's way of saying "make that Toyota thing go away and it will be worth the trouble *wink wink*"...