Quote:
Originally Posted by Sooner or later
His exact quote:
"Last spring, in the midst of an equity market meltdown, and I have been trading for 40 years and I have never seen anything like this, right in an equity market meltdown the bond market went down by 18 points in one day..." he goes on to say that foreign markets sold a trillion dollars and it continues on today.
What you said is not what he said. You:
"for the first time in at least 40 years there was an OUTFLOW of foreign capital from US Treasuries"
There have been outflows in the past. He had not seen outflows in a market meltdown, not that he had never seen outflows. He was clearly talking about 2020, not current 2021.
It was a ***** to find the actual numbers. I had just about given up.. no data released beyond March. They are here:
https://www.federalreserve.gov/data/secholdtrans/treasurybondsnotes20210531.htm
In millions Release date was May 2021.
2019 outflow of 133,489
2020 outflow of 540,042
Jan/March 2021 inflow of 4,271
Jan 2021 outflow 48,739
Feb 2021 outflow 65,464
March 2021 inflow 118,873 |
Semantics...
In times of global distress the USD and Treasuries have been "safe havens" or the last best place to put your money. Druckenmiller cited the last 20 years. He said for the first time in his career that their has been a capital outflow from Treasuries inn a time of distress.
This indicates that the USD is NO LONGER BEING viewed as the "Safe Haven" that it once enjoyed. IT IS AN ADVERSE SHIFT..that is NOW taking place..or should one say the nascent stages of that shift. The rise of Crypto is an effort to find a viable alternative..and there in lies the problem there still is NO VIABLE ALTERNATIVE to the USD. Wiley Coyote is stuck with the USD...(Peter Schiff used this analogy to describe foreign holders of USD's..they have as yet not recognized that they are treading on thin air with the USD and when they do like Wiley they will go.. BOOM).
He continued the out flow continues...I posted e a while back that the Chinese were lightening their Treasure load by 200B..down from about 1T...to 800B. The Chinese since 2009 have been rolling their maturity dates into shorter and shorter terms..and have not materially added to their Treasury position of about 1T since that date. They saw the hand writing on the wall back in early 09 and not wanting to shoot themselves in the foot have been positioning themsleves away from USD hegemony.
NO MATTER HOW YOU WANT TO GLOSS IT OVER A CRACK IN THE ARMOR HAS APPEARED IN THE USD, it has wobbled..Further the FED by taking excess liquidity out of the system on a daily revolving basis is tightening the monetary supply by the only viable means that they can..they can not raise rates because of debt service and the hissy fit Equities would have as they would perceive a slowing economy.
It doesn't take a genius to know that there are going to be ebbs and flows in the Treasury market as circumstances change for investors. What is noticeable out flows and inflows are about even...in times past their would be a decided inflow as the US debt load grew..
