Foreigners Decrease US Treasury Holdings

Yesterday the Treasury Dept. released the Treasury International Capital (TIC) Data for June. This report reveals the increase or decrease in foreign ownership of U.S. Treasury bonds. Since we are so dependent on foreigners financing our huge deficit, this report is very important.

From yesterday's report:

Foreign holdings of dollar-denominated short-term U.S.
securities, including Treasury bills, and other custody liabilities decreased $19.5 billion. Foreign holdings of Treasury bills decreased $11.3 billion.

Banks’ own net dollar-denominated liabilities to foreign
residents decreased $82.9 billion.

Monthly net TIC flows were negative $31.2
billion. Of this, net foreign private flows were negative $27.7 billion, and net foreign official flows were negative $3.5 billion.

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Not only have foreigners cut back on their purchases of US debt, they have actually been net sellers of U.S. securities. This has huge implications for the value of the U.S. dollar, future interest rates and inflation.-Lou