China Cutting U.S. Treasury Holdings, Sort Of

Bad news on the debt front… China is selling U.S. Treasury bonds!  The good news… not by that much.  The report this morning showing foreign holdings of U.S. securities, with a two-month delay might we point out, showed that China sold U.S. Treasury bonds in November.  The world’s manufacturer still remains the top holder of debt owed by the United States.

It is of little surprise that the foreign money flows showed to be net buyers of U.S. debt.  With all that is happening in Europe, how many risk averse investors can mentally loan funds to those nations?  So what if institutions made a small fortune in recent weeks buying that troubled debt up.

The monthly report from the Treasury International Capital, or TIC, showed that China’s net holdings were down only by $1.5 billion to $1.133 trillion.  The reason this matters is that the October holdings showed a decline of about $14.2 billion and that was more than a 1% decline in the total holdings.

Be advised that the data turned out by this report is often difficult to quantify, which is part of why the report is so delayed.