Dear CIGAs,

Following is a chart depicting the reported holdings of US Treasury debt by some of the largest creditor nations.

Each month the Treasury reports this data and each month we plot it to attempt to gain some insight into who is financing the continued profligacy of the US. Last month the numbers reported out showed the Chinese selling $34.2 billion worth of Treasury debt in December 2009. That was enough to drop them into second place behind Japan as the largest holder of US Treasuries. That obviously caused quite a stir at the time.

This month, Treasury revised the holdings data and while they show China still selling that same $34.2 billion from November to December 2009, they made an upward adjustment to the overall holdings number, increasing it by a substantial $139.4 billion. That was more than enough to kick them back up into first place once again as the largest holder of US Treasury debt ($894.8 billion).

The Treasury reported that China did sell another $5.8 billion worth of US debt from December through January 2010, dropping them down to $889 billion as of the most current data.

It appears that a large chunk of those Treasuries that were moved over into the China column came off of the reported holdings of the UK. Their number was adjusted downwardly by $124.4 billion. Also, the Caribbean Banking Centers were downwardly revised $56.5 billion. It is not unusual to see a significant adjustment to the UK with most of that moving over to China. It just tells us that some Chinese are buying through London money centers.

The last chart shows the relation of the US Trade deficit in relation to both long term and short term money flows.

Click charts to enlarge in PDF format