Rising Sun: Japan Overtakes China as Largest Creditor to US

This post is by Tyler Durden from Zero Hedge.

Gradually we are getting confirmation that Chinese “posturing” about offloading US debt is all too real. The most recent TIC data confirmed the Treasury’s greatest nightmare: China is now dumping US bonds. In December China sold $34.2 billion of debt ($38.8 billion in Bills sold offset by $4.6 billion in Bonds purchased), lowering its total holdings $755.4 billion, the lowest since February 2009, and for the first time in many years relinquishing the top US debt holder spot to Japan, which bought $11.5 billion (mostly in Bonds, selling $1.4 billion Bills) bringing its total to $768.8 billion.

Also, very oddly, the surge in UK holding continues, providing yet another clue as to the identity if the “direct bidder” – as we first assumed, these are merely UK centers transacting primarily on behalf of China as well as hedge funds, which are accumulating US debt under the radar. UK holdings increased from $230.7 billion to $302.5 billion in December: a stunning $70 billion increase in a two month span. Yet, with the identity of the UK-based buyers a secret, it really could be anyone… Anyone with very deep pockets.

Blue = China, Red = Japan, Green = UK, Purple = Oil Exporters, Blue = Caribbean

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