Why the hell is Belgium buying so much US debt?

The tiny country of Belgium – my beloved hunting grounds for three years a while back – with a GDP of $484 billion, a country which you can cross by bicycle in a single day if you’re really fit, a country that became famous to the chagrin of some people because it did just fine for a couple of years without a national government – well, that tiny speck of land is starting to grow an enormous mountain of US Treasury Securities.

In February, according to data just released by the US Treasury Department, it added $30.9 billion, taking its mountain of Treasuries to the phenomenal level of $341.2 billion, or about 70% of its GDP.

It put that speck of land with 11 million people in third place, behind export powerhouse China ($1.27 trillion) and former export powerhouse and now money-printing powerhouse Japan ($1.21 trillion), the second and third largest economies in the world.

From August last year, when an already lofty $166.8 billion in Treasuries were held in Belgium, holdings have soared by 105%! Why this sudden jump?

US Treasuries Belgium

What the heck is going on in Belgium?

It has a vibrant export sector – right away, I can think of superb chocolates, addictive beers, and many other products. But have dollar-denominated sales multiplied umpteen times overnight in a miraculous fashion? Nope. Nothing happens quickly in Belgium. Getting even something minor through the bureaucracy, as we found out, requires superhuman patience, finely honed finesse, and a surprising amount of money. Nope, it couldn’t be anything having to do with Belgium’s real economy.

Leaves the other option: that Belgium has become a financial center for Treasuries owned by other countries, or that it at least has become a transit point for them.

Over the same period since August, Luxembourg, a true financial center with legendary opaqueness, saw its Treasury holdings decline from $143.8 billion to $136.8 billion. Ireland, where Corporate America registers much of its money to avoid US taxes, has also seen Treasury holdings drop since August from $120 billion to 111.4 billion.

BelgiumSo why Belgium? Mystery swirls around it for now. But there are some clues….

One of them is called Euroclear. It’s a big outfit. It holds €24.2 trillion ($33 trillion) in assets. Its clients include, as it says, over 2,000 global and local custodians, broker dealers, central banks, commercial and investment banks, investment managers, and supranational organizations in more than 90 countries. The total value of securities transactions it settles for them exceed €570 trillion per year. It proudly points out: “Every 6 days we settle transactions equivalent to the GDP of the EU.”

And it’s headquartered in Belgium. It could very well be that a government has used this mega-outfit to move its Treasury holdings away from the long muscular arm of the US. Indeed, Euroclear told the Financial Times that the volume of Treasuries it holds had “gone up dramatically” in recent months.

There is a suspect, so to speak. The Treasury’s ledger of Major Foreign Holders of Treasuries shows that Russia’s holdings were $126.2 billion at the end of February, down 23.5% from a year earlier. That’s quite a drop. Clearly, President Vladimir Putin has had it. Gradually and ever so carefully, he is diversifying Russia’s foreign exchange holdings. And occasionally, the Central Bank is selling some of them in an effort to prop up the ruble. But these movements belie the sudden and massive volatility of another ledger, the Federal Reserve’s Securities Held in Custody for Foreign Official and International Accounts.

As the US national debt ballooned by over $1 trillion per year, foreign countries were among the largest buyers. So the Fed’s leger of Foreign Official Accounts peaked at $3.02 trillion on December 18, having soared over 150% in just six years. But then it dropped week after week, and finally plunged by a record $104.5 billion during the week of March 5 to a recent low of $2.855 trillion – only to see some of those Treasuries reappear over the next few weeks, leaving behind a record trail of volatility.

US-treasuries-held-in-custody-at Fed-for-foreign-official-accounts

That mystery – a record pile of Treasuries suddenly disappearing and now reappearing – hasn’t been solved. In May, when we get the March data from the Treasury International Capital (TIC) System, we might learn more. All we know for now is that someone in panic-mode yanked a pile of Treasuries away from the Fed and transferred it to some other entity.

The entity could be Euroclear, which would then as custodian, and thus under its name, transfer some of them back to the Fed. Now that they’re no longer in Russia’s name, the US government would presumably have trouble freezing them as part of the sanction spiral unfolding over the Ukraine – couldn’t even credibly threaten to freeze them.

And it opens a broader issue: if otherwise inconvenient foreign holders of Treasuries, like Russia, get harassed by the US Government, or by Congress, what lesson will the Chinese learn from it? And what will they do?

Ha, they’re already doing it: the word dollar didn’t even come up when the Bundesbank signed the agreement with the People’s Bank of China. President Xi Jinping and Chancellor Angela Merkel looked on. It was serious business. Everyone knew what this was about. No one had to say it. Read…. Dollar Hegemony Under Attack By Export-Superpowers Germany and China

SEE ALSO:
European Central Bank “models” €1 trillion in money printing
Obama lie #847: ‘There is no debt crisis’
The greatest debt crisis the world has ever seen is coming
Economic collapse is inevitable, here’s why…
World Bank whistleblower reveals how the global elite rule the world
– 10 signs the global elite are losing control

US debt rises $328 billion in single day, surpasses $17 trillion for first time

Source: http://www.testosteronepit.com/home/2014/4/16/what-the-heck-is-going-on-with-us-treasuries-in-belgium.html

7 comments

  1. Belgium=Babylonian(Satanist) Brotherhoods home turf AKA Black Nobility. It’s simply another financial scam, when the real US debt is in the hundreds of TRILLIONS, may as well steal more while they can! On the other side of the NWO dictatorship you are either an all powerful and rich lord or an expendable bag of meat. Therefore get as rich as you can now either by hook or crook. Those vile people who are barely human subscribe to human sacrifice(mostly children), pedophilia, blood drinking, mass public ritual sacrifice via mind controlled slaves etc, so nothing surprises me.

  2. They have been working on this for a long time. Nations can no longer exist. What happens when the wind changes and powerful countries lose their entire food and water supplies…terrible war. Not some boy scout escapade like WW1 or WW2. Anyone who has ever been truly hungry or thirsty knows what desperation can do. So they will crush us into submission with our own money supply. It’s about the survival of the human race and no flag can stand in the way. The debt of the world originates with the Fed, rubles, pounds, euros, yuan…all are founded on the dollar. One tiny push and down they all go. The really sad part of all this is that the villain in the story is actually us. The moment we start thinking of ourselves as one human race instead of individual people, cultures, and nations, will be the moment it all gets better. If it takes lowering the standard of living for the entire world to that of Somalia then that is what they will do. Look around, there are very few true countries left on the planet, Cuba, Venezuela, North Korea, Iran, sort of Russia. Who wants to live in a crappy country when obviously the world is so much better. The war is almost over and the nations lost.

  3. China no longer buys US dollars. To keep up the pretense of QE tapering when no one wants the debt, SOMEONE has to buy it. As long as it has the appearance of normality (movement of funds) then the farce can be continued longer. Just as estimates are reported every month in debt and unemployment, the figures are later “revised’. The fact is that since the Fed controls both the collection of the information and the publication of the information, they can report whatever they want, just to make the numbers consistent. It doesn’t need to be true. They just need no one to expose the reality. As long as there is no audit, they can issue dollars and report whatever they want. They just need someone to launder the money. Belgium is perfect, because no one pays attention to it, so it’s the perfect place to launder drugs, diamonds, and now US treasuries under the deniability of EU, NATO, European Parliament, etc. As long as the money keeps moving, the charade goes on. But when it stops…. the entire world monetary system collapses!! So is this good news or bad news?

  4. WTF i didn know till know. for beeing a belgian this is big news! shows the power or in-power off our goverments

  5. Michael Christacopulos

    I don’t have a comment but I don’t see any other way to receive follow-up comments.

  6. It doesn’t take much sleuthing to connect the dots here. Apparently, Belgium has made a Nigerian banking scam-type deal with the US Federal Reserve to “buy” US debt with money out of thin air- ‘wink, wink’. This is nothing more than an electronic shell game to hide the massive tsunami of dollar-denominated debt from the rest of the world. Much like how the ongoing QE pumping into the banks and Wall Street is simply recycled back into Fed accounts, there to pay out risk-free interest to co-conspirators. I don’t need a Master’s in Economics to know this can only end badly.

  7. Home of NATO, perhaps its their financial wing?

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