A new report from the U.S. Treasury called the Treasury International Capital Report is showing that, at least for now, China (and other nations in total) remains a net buyer of U.S. Treasury debt. In the month of April, foreigners were net buyers of longer-term U.S. securities.
Treasury debt held by China rose by $1.5 billion to $1.146 trillion. This may not sound like much, but it is important because China was a net seller of Treasury debt to the tune of about $11.2 billion. This is no ‘back to normal’ yet for China but it is still showing that the U.S. may be the least ugly debtor in a world of deadbeats.
Japan reduced its holdings again but remains very high with over $1.06 trillion in total Treasury holdings.
One key issue is that foreign investors as a total purchased a net $37.26 billion in April, and that is before the global concerns really started to grow in May. March’s net foreign buying of Treasuries was $20.09 billion.
The United States gets to keep financing its deficits with foreign capital. For now.
JON C. OGG