Maybe Interesting, Perhaps Somewhat Useful Other TIC Nuggets

I’m just going to post some brief comments on other parts of the TIC data. The major takeaway from the May 2021 update is what I wrote earlier, how what these figures show is both entirely consistent with what will be to most people a surprisingly long history as well as completely misconstrued in mainstream conversations (what few may take place).

We’ll begin with official institutions. They were again on the selling side of UST’s, after having been solidly reflationary buying (also backward to convention; central banks adding UST’s during reflation when everyone is supposed to be getting out of USTs) back in March. Not huge selling and a single month don’t by itself lead to any solid conclusions.

However, as discussed at length earlier, this is hardly a singular indication or isolated case.

From there, we’ll look at a few interesting regional/geographic dollar distributions. Starting with, ironically, Japan, the TIC balances show now two months of reversing the prior decline in what US banks report to claim from Japanese counterparties (ironic in how I used the history of Japan selling UST’s to illustrate the opposite of what these last two months of this series indicate).

Dollar activity with Japan had dropped considerably – one of the first clues for brewing difficulties – beginning last December. A couple of months of rebound isn’t necessarily reflation-ish, it’s not uncommon for variations month-to-month or a for several months.

The Caribbean, on the other hand, is a major eurodollar system node still shrinking and nearly identical to Japan before April and May this year: December 2020. You don’t want to make too much out of this data, either, simply because it is inconsistent, torn up by discontinuities, and applies to a sector of the global eurodollar market notorious for being utterly opaque and unreported in any fashion.

You can blame Caymanian denizen Emil Kalinowski; and if you don’t wish to do so directly, I’m happy to on your behalf.

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Disclosure: This material has been distributed for informational purposes only. It is the opinion of the author and should not be considered as investment advice or a recommendation of any ...

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