From the department of bailing-out-their -Atlantic-neighbour:
...in the course of responding to a linked Fallows piece in the Atlantic in comments at Ezra's I ran across a very intriguing chart from TreasuryThis is very interesting news - it shows that the US Dollar is being slowly sold off by overseas central banks. This is one reason why the dollar is dropping in value, and also why the British Pound isn't appreciating much - the Bank of England is obviously selling Pounds and buying US Dollars. Not enough, it seems.
Fallows was putting out the standard line: We buy toys from China, China turns around and finances our deficit, ultimate end result trainwreck. Well oddly enough the numbers don't support that at least for FY2007. Our key Asian import trade partners were not net buyers of treasuries. In some cases they were very large net sellers.
Country Nov 2006 Nov 2007 $Change
Japan $622 bn $580 bn -$42 bn
China $393 bn $386 bn -$7 bn (-$34 bn since March 07)
Taiwan $59 bn $49 bn -$10 bn
Korea $64 bn $41 bn -$23 bn
Korea liquidated a full third of holdings and no one noticed.
Who bailed out the market?
U K $76 bn $315 bn
Oil Exporters $106bn $127 bn
Brazil $52 bn $120 bn
I'll try to get a piece up on my site. But to say that this swing is under reported doesn't begin to touch this. At this rate we are only a month from having the UK replace China as second largest holder of US Treasuries. The world looks a lot different when your future financing is the hands of the Bank of England rather that the various central banks of Asia.