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Thread: Russia cuts Treasury holdings in half as foreigners start losing appetite for US debt

  1. #1

    Russia cuts Treasury holdings in half as foreigners start losing appetite for US debt

    Russia cuts Treasury holdings in half as foreigners start losing appetite for US debt

    Foreign governments pulled back their purchases of longer-term U.S. debt as trade tensions escalated around the world.

    The declines are relatively small so far for notes and bonds — just shy of $5 billion each for March and April, the most recent months for which Treasury data are available — but it signals a potentially troubling trend.
    ...
    One of the most glaring declines has come from Russia, which sliced its holdings of U.S. debt nearly in half from March to April, from $96.1 billion to $48.7 billion. Russia's Treasury ownership peaked at $108.7 billion in May 2017.

    In all, foreigners held $6.17 trillion of the total $14.84 trillion of Treasury debt outstanding through April. The national debt including intragovernmental holdings has swelled to more than $21 trillion.

    Russia isn't the only country cutting back in its U.S. holdings.

    China, the largest owner of U.S. debt, reduced its level by $5.8 billion in April to $1.18 trillion, while Japan, the second largest, cut its holdings by $12.3 billion to $1.03 trillion. Ireland, the U.K. and Switzerland also pulled back.

    When counting all securities (including T-bills), the April decline came to $47.6 billion, a 0.8 percent reduction from March.

    Finding buyers for government debt has become increasingly important since the Federal Reserve halted its bond-buying program in October 2016 after swelling its holdings to more than $4.2 trillion.

    Since October 2017, the central bank has been allowing a set level of proceeds it gets from those debt instruments to run off each month, while continuing to reinvest the rest. The Fed's portfolio of Treasurys and mortgage-backed securities since then has declined by $116 billion, or 2.8 percent, while foreign holdings also have fallen off by 2.5 percent.

    With the budget deficit expected to rise in coming years — passing $1 trillion in 2020, according to Congressional Budget Office estimates — the government has been issuing debt heavily. The total for 2018 has been $443.7 billion, a nearly ninefold increase from the same period a year ago and a 139 percent jump from 2016, according to the Securities Industry and Financial Markets Association.
    ...
    More: https://www.cnbc.com/2018/06/18/russ...r-us-debt.html
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  4. #3
    This is definitely one of the more important issues facing the USA. The Fed can't maintain the heavy lifting into perpetuity. When the tipping point is reached and foreign governments lose their appetite for US Debt, the fat lady will be warming up to sing.

  5. #4
    Almost all of the reduction in April came from Russia who has been trying to prop up the value of their ruble- $47.4 billion of the total $47.6 billion net reduction in foreign holdings. They are also trying to raise more money due to the costs of sanctions imposed on them by the EU and US. Russia holdings are now $48.7 billion putting them below Bermuda. Russia now has 0.8% of all foreign held US debt and 0.0002% of all US debt. A pretty insignificant amount.

    Compared to one year ago, foreign holdings of US debt are up $109 billion.

    http://ticdata.treasury.gov/Publish/mfh.txt
    Last edited by Zippyjuan; 06-19-2018 at 12:27 PM.

  6. #5
    Quote Originally Posted by Zippyjuan View Post
    Almost all of the reduction in April came from Russia who has been trying to prop up the value of their ruble- $47.4 of the total $47.6 net reduction in foreign holdings. They are also trying to raise more money due to the costs of sanctions imposed on them by the EU and US. Russia holdings are now $48.7 billion putting them below Bermuda. Russia now has 0.8% of all foreign held US debt.

    Compared to one year ago, foreign holdings of US debt are up $109 billion.

    http://ticdata.treasury.gov/Publish/mfh.txt
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  7. #6
    Quote Originally Posted by TheTexan View Post
    It was the Russians, I knew it
    Luckily, appetite for US debt is infinite.

  8. #7
    Buying US Debt is foolish .
    Do something Danke



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