One of the idiosyncracies of the rather obscure at times Treasury International Capital flows data is that when reporting on the number of Treasuries purportedly being held by foreign nations, the data is taken from the country in which the transaction is actually conducted and not necessarily the country of origin behind the purchase.
In looking over the recent data, it appears a fairly large amount of Treasury business is being handled through London as evidenced by the sharp increase in reported Treasuries holdings in the UK.
It has been my experience with this report, that when the adjustments are made once a year and the Treasuries are actually recorded as to what nation the purchase or sale originated from, that a rather significant amount of the UK Treasuries are moved to the Chinese category. At least that has been the pattern for as far back on the chart as I have chosen to go, namely 2004 - 2009. However, last year, 2010, during the annual readjustment month of June, there was little change in the reported Chinese holdings or those of the UK for that matter.
"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat
Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput
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