TIC data & why it is important

Folks, the TIC data (that stands for - Treasury International Capital - it used to be called the Net Foreign Security Purchases report) basically points to foreign investment in our capital markets. Lately - unfortunately, it stands for lack of investment. Here is a note from Chris Gaffney who has taken over the helm of The Daily Pfennig while Chuck Butler is on vacation about this subject:

"Global demand for US financial assets weakened in January as both China and Japan, the two biggest holders of Treasuries, reduced their positions. The Net Long-term TIC Flows were expected to come in at $47.5 billion for the month, but instead just $19.1 billion of US financial assets were purchased. Including short-term securities, total investment flows show foreigners sold a net $33.4 billion in January after a net buying of $53.6 billion the previous month.

AND:

China has been a net seller of US Treasuries for three straight months now, and Japan doesn't seem to have the ability to pick up the slack. We have been warning of this for some time now, and it looks like we may be finally seeing a reduction in demand for US investments.

AND:

Without a cooperative China, we could see a 'failed' auction right here in the US, which would shake the very foundation of our financial system."

Wow - I agree with Chris! He has it right! Chuck Butler has taught him well! Where is that gold hot line when I need it?!