Just for fun let’s start with a bit of silly dialog from a two-decades old sci-fi novel …
… “And the government files that Demosthenes published–they were genuine.”
“But Father–you joined many others in claiming that they were forgeries.”
“Just as the gods speak only to a chosen few, so the secrets of the rulers must be known only to those who will use the knowledge properly. Demosthenes was giving powerful secrets to people who were not fit to use them wisely, and so for the good of the people those secrets had to be withdrawn. The only way to retrieve a secret, once it is known, is to replace it with a lie; then the knowledge of the truth is once again your secret.”
“You’re telling me that Demosthenes is not a liar, and Congress is.”
“I’m telling you that Demosthenes is the enemy of the gods. …”
Xenocide (1991), by Orson Scott Card, pp 61-62.
The Fed’s own holdings of MBS dropped a moderately large $13.808 billion this week and foreign central banks holdings in the aggregate rose, but only marginally.
This week’s Reuters report1 was, as usual, based on the weekly update from the NY Fed’s H.4.1 table site.2 Here is Doom’s updated CSV version3 of the agencies and treasuries foreign central bank holdings data set.
The treasuries number has been pretty flat over the last month or so.
The Treasury Debt number itself turned to a gain of $4.053 billion, reversing last week’s selloff with over $1 billion to spare.
Agencies’ shrinkage came close to last week’s figure, reducing by $2.513 billion.
*Agen-FM: The dotted line is the foreign central banks’ Agency Debt holdings reduced by the level of the Fed’s own MBS holdings. Since the FRBNY itself is a lightly audited peculiar amalgam of foreign & domestic, central and private bank I think it might be useful to consider the hypothesis that for a while starting in January 2009 the Fed’s MBS holdings were being quietly deemed to be “foreign.” That is, for the first half of ’09 the dotted line seems more sensible than the red one.
The net of US obligations held grew, but by just $1.540 billion, which reverses less than a third of last week’s combined shrinkage.
Twist’s ratio graphs ticked down a bit this week.
The Setzer graph numbers both retreated again; the anniversary date recorded gains, especially in treasuries.
Notes and References
: “Foreign central banks’ US debt holdings rise – Fed”, by Gertrude Chavez-Dreyfuss, Reuters, December 16, 2010.