Wednesday, October 21, 2015

CNN Money: The Biggest American Debt Selloff in 15 Years

CNN Money runs this article which notes a key trend reversal in foreign countries holding US debt in their reserves. For the first time in a long time US debt is being sold off in a big way. Also, total global cash reserves have dropped for the first time in years. Foreign countries no longer have the cash to keep buy US debt as they have in the past. If this trend continues it could have big implications on US interest rates and the global economy, Below are some quotes from the article.


"Countries around the world are selling their U.S. government debt holdings this year by the largest amounts seen since at least 2000. 

China has been selling U.S. debt but it's not alone. Lots of emerging markets like Brazil, India and Mexico are also selling U.S. Treasuries. Not that long ago all these countries were all huge buyers of U.S. debt, which is viewed as one of the safest places to park money.
"Five or six years ago, the big concern was that China was going to own the United States," says Gus Faucher, senior economist at PNC Bank. "Now the concern is that China is selling Foreign governments have sold more U.S. Treasury bonds than they've bought in the 10 consecutive months through July 2015, the most recent month of available data from the Treasury Department.
Just in the first seven months of the year, foreign governments sold off $103 billion of U.S. debt, according to CNNMoney's analysis of Treasury Department data. Last year there was an overall increase of nearly $45 billion.them."
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