Foreign Central Banks are DUMPING T-BONDS!! Who do you think is buying this s*** and bailing out our $1.5 TRILLION annual deficits (actually $5 Trillion according to Shadow Stats) !?!
China? Bwahahaha.
Japan? Bwahahaha.
Europe? Please. Sterling is choking on his popcorn!
The answer is The Fed. PERIOD!!! QE TO INFINITY AND BEYOND IS ONGOING!!
Holdings of U.S. Treasurys by foreign central banks has fallen by a record amount over the past four weeks according to the latest Federal Reserve data.
The net $69 billion drop in Treasury holdings registered at the Fed by foreign official institutions comes as benchmark yields ended 2011 near record low levels and when the U.S. central bank is conducting Operation Twist, its $400 billion program to sell shorter-lived Treasury bonds and buy those with longer maturities.
The decline in foreign holdings of Treasurys in recent weeks has not resulted in higher yields and lower prices because other investors have sought the safety of US debt.
"Given where the 10-year Treasury is ending the year, it's difficult to say the flows are a bearish move," said Ian Lyngen, strategist at CRT Capital.
The yield on 10-year notes was set to end 2011 below 1.90 percent on Friday and the Barclays Capital index of long-dated Treasurys has rallied nearly 30 percent this year, its best annual performance since 1995.
"While other buyers have willingly taken up the torch up to this point, it seems clear that this [foreign official flows] source of demand has waned since Operation Twist took yields to these levels and this investor base has little interest in sub-2 percent 10-year yields," said John Briggs, strategist at RBS Securities.
