Let me preface this post by noting that these capital flows are EXTREMELY volatile numbers now, so I don't want to over-hype one month's report. However, the numbers on demand for U.S. paper in January are dismal.

- overall demand for U.S. paper plummeted by 75%
- purchases of Treasuries were down over 80%
- foreign investors are SELLING U.S. corporate bonds (on a net basis)

Now while I acknowledge that these numbers are "volatile", they are also MANIPULATED - meaning (as usual) that the REAL numbers would be much worse. For instance, there are NO foreign buyers for U.S. Treasuries at all - so we can only GUESS at how much Treasuries were SOLD by foreign entities (on a net basis) in February.

So the ABSOLUTE value of any of these numbers has little meaning. Rather, about the only thing of value we can extract from these monthly reports is the DIRECTION OF SENTIMENT when it comes to the appetite for U.S. paper.

And as we saw in February, that "appetite" had totally dried-up at that time. Note that when demand for U.S. paper collapses that this INCREASES the motive to manipulate gold and silver - to discourage people from DUMPING paper for metal.

Thus (in hindsight) we will often note that periods of EXTREME metals manipulation coincide which PLUNGES IN DEMAND for U.S. paper. Remember that the entire U.S. economy is a Ponzi-scheme. Once the chumps STOP buying this worthless paper the Ponzi-scheme ENDS (i.e. all the paper goes to ZERO).

P.S. Speaking of Treasuries manipulation, note this quote:

"...China-based investors increased their holdings of U.S. Treasurys for the second straight month."

If you send B.S. Bernanke to Hong Kong for a vacation, and while he's there have him buy-up $BILLIONS in Treasuries with his illegally counterfeited USD's, then PRESTO!, B.S. Bernanke becomes a China-based investor."




"Foreign demand for U.S. assets down in February"

www.marketwatch.com/story/foreign-demand...uary-2012-04-16-9050

WASHINGTON (MarketWatch) - Foreign investors were buyers in February of a net $24.8 billion of long-term U.S. securities, Treasury Department data released Monday showed. This is down from the revised $95.7 billion of net purchases in January. Overseas investors were net buyers of $15.4 billion of Treasurys in February, down from net purchases of $84 billion in January. They bought a net $10.1 billion of government agency bonds in February compared with $9.6 billion in January. International demand for corporate bonds remained weak. Foreigners were net sellers of $8.2 billion of U.S. corporate bonds in February after net sales of $1.3 billion in the previous month. Foreign-based investors purchased a net $7.6 billion of U.S. equities in February. Taking into account purchases by U.S. residents and overseas investors, the net foreign purchases of long-term securities was $10.1 billion in February, down from $102.4 billion in January. According to the data, China-based investors increased their holdings of U.S. Treasurys for the second straight month.

P.S. Speaking of Treasuries manipulation, note this quote:

"...China-based investors increased their holdings of U.S. Treasurys for the second straight month."

If you send B.S. Bernanke to Hong Kong for a vacation, and while he's there have him buy-up $BILLIONS in Treasuries with his illegally counterfeited USD's, then PRESTO!, B.S. Bernanke becomes a China-based investor."

Excellent point Jeff, indeed all the wall street factory outlets in China, India and the rest of the world can be pretty much counted in that way.

My theory is that they don't care anymore if foriegners even buy the paper.

Give a bank a 0% interest loan, with the agreement that 90% or more of that loan must be used to buy US paper debt. (I have no idea if this is happening for sure, but it's my theory).

Banks win because they get to show "safe capital" plus US Fed Notes get to be computed at face value, not the discounted rate paid.. plus plus. They don't care what interest rate they are getting on the paper, it was free paper anyways.

Government wins because the Fed Notes are being bought to such an extent that interest rates are low.

It's really pretty smart way to hide things.

Government borrows from Fed, Fed gives money to banks, banks buy the Government debt (for free), banks show profit.

rroush wrote:
My theory is that they don't care anymore if foriegners even buy the paper.

Give a bank a 0% interest loan, with the agreement that 90% or more of that loan must be used to buy US paper debt. (I have no idea if this is happening for sure, but it's my theory).

Banks win because they get to show "safe capital" plus US Fed Notes get to be computed at face value, not the discounted rate paid.. plus plus. They don't care what interest rate they are getting on the paper, it was free paper anyways.

Government wins because the Fed Notes are being bought to such an extent that interest rates are low.

It's really pretty smart way to hide things.

Government borrows from Fed, Fed gives money to banks, banks buy the Government debt (for free), banks show profit.

Rroush, I don't know if you caught this commentary from a couple of months back, but I'm pretty much saying the same thing:

Maximum Fraud in U.S. Treasuries Market

It's ridiculous to even SUGGEST that there are people lining up to pay the HIGHEST PRICES in HISTORY for U.S. paper - at a time of maximum supply, and when the U.S. is obviously hopelessly insolvent.

If you're going to buy a bond from an insolvent debtor then you want to be paid AT LEAST close to 10% on that bond for the (huge) risk of holding it. Suggesting there are people accepting 2% interest, 1% interest, and even PAYING to hold U.S. Treasuries - while 10+% inflation destroys the underlying paper - is literally the stupidest thing the propagandists have EVER tried to get the sheep to believe.

China has been a NET SELLER of U.S. Treasuries for over a year now. How LOW does a person's IQ have to sink to believe that the biggest BUYER of U.S. Treasuries can become a SELLER - and the U.S. government can STILL get "record prices"???



And in keep in mind that this comes when the propaganda machine continues to boast about the "robust U.S. economic recovery". By DEFINITION the bond market is supposed to do WORSE when the economy is humming along.

U.S. bond prices suggest the U.S. is in the midst of something WORSE than the Great Depression - but you don't hear THAT from any of the talking heads.

samix wrote:
P.S. Speaking of Treasuries manipulation, note this quote:

"...China-based investors increased their holdings of U.S. Treasurys for the second straight month."

If you send B.S. Bernanke to Hong Kong for a vacation, and while he's there have him buy-up $BILLIONS in Treasuries with his illegally counterfeited USD's, then PRESTO!, B.S. Bernanke becomes a China-based investor."

Excellent point Jeff, indeed all the wall street factory outlets in China, India and the rest of the world can be pretty much counted in that way.

Samix, this must rank as the MOST clumsy shell-game in history.

At the same time the U.S. government NEEDS to flog maximum SUPPLY of its paper at the highest prices in history (or go bankrupt on the interest payments in the SHORT TERM, like Greece) the Treasury Department just happens to decide to totally change the auction process - making it totally opaque, so that NO ONE knows who's buying what.

Then MAGICALLY we're told that right after that the (anonymous) buyers began to line up to pay record prices.



If I could fool a SIX-YEAR-OLD with a ruse that clumsy I would have no respect for the six-year-old's intellect.



It's like the proverbial cheap magician - who needs to turn off the lights to "perform his magic."