Bill Gross Slashes U.S. Treasury Bond Holdings

[Northern Boy]

Pimco’s Total Return Fund, the largest bond fund in the world and which is run by Bill Gross, has reported that its holdings of US government-related securities fell from 22 per cent in December to 12 per cent in January.

The proportion of US government-related holdings, which includes US Treasuries, is at the lowest level held by the $239 billion fund since January 2009 when it held 15 per cent of its assets in the category.

In September last year, one-third of the fund was held in government-related securities.

Under almost any scenario, interest rates appear to be heading higher. If the Fed keeps printing money, price inflation will cause rates to climb. If the Fed stops printing money, the lack of Fed buying will push rates higher. Meanwhile, the Treasury will continue to issue more and more debt, not a pretty picture. There is no reason to hold long-term debt, at present.

http://www.economicpolicyjournal.com/

Thats going from roughly 52.6 billion to 28.7 billion

[Northern Boy]

China Sells Treasurys for Second Month

http://www.economicpolicyjournal.com/

China sold U.S. Treasurys for the second month in a row in December, further reducing its holdings from its largest position in nearly a year in October, but remaining the largest foreign holder, the Treasury Department said Tuesday.


China cut its net holdings by $4 billion to $891.6 billion, following net selling of $11.2 billion in November.

Overall, net foreign purchases of long-term U.S. securities were $76.8 billion. Of this, net purchases by private foreign investors were $66.3 billion, and net purchases by foreign official institutions were $10.5 billion.