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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (18962)	9/23/2004 3:44:06 PM
From: russwinter	Read Replies (1) \| Respond to of 110194

I disagree with Heinz on virtually every point. But, right now I'm particularly focused on #4, foreign CB purchases. The number is easily gleanable out of Federal Reserve data. "Foreign custody holdings"( CBs) of US debt is now $1.291 trillion, up $329.6 billion (roughly a third of the twin deficits) in the last year. I don't know what he means by "to a long term degree", but they've been at this awhile, and are mostly certainly influencing (actually distorting it) the market. In fact they are setting the price and monopolizing it and overwhelming the private sector. Who would take on such a monster? Heinz has the whole free flow of capital scheme vastly overrated, instead it's a merchantilistic rig job. From the 8/17 CI, plus there's a chart (foreign net purchases) you might wish to post. By the way July's numbers are worse, and I can't imagine what Sept. will look like.: It just so happens that Japan single handedly accounted for 37% of all net US financial assets purchased by the foreign community in June. They also bought more than 50% of all Treasuries purchased by foreign interests. Heaven forbid Japan ever decides to deploy their hard earned capital in an alternative manner other than buying US Treasuries sporting near generation low yields at the moment. It's not just the Fed who's the fountain of liquidity. They have company. Believe us, they have company.