Since the onset of the Great Financial Crisis, foreign holdings of U.S. debt have more than doubled. One reason for this increase is the United States status as a haven. Another reason is that countries all over the world were forced to intervene in currency markets. When a country’s currency strengthened too much, it would sell its own currency and buy dollars, which were invested in treasuries. Now currencies are weakening too much against the dollar, the process works in reverse. The chart above is current through 1Q2013, and we should expect a decrease in 2Q2013.
Distrust in government institutions leads to conspiracy theories. ICBC ATMs stopped working today due to a software upgrade issue. In the time it took the bank to explain the outage, rumors of its demise had begun circulating. As the chart above illustrates, the Chinese cash crunch has abated, and no ICBC is not in danger of imminent collapse.
Croatia should have no problem integrating into the EU. The charts above show why. Like the Eurozone, it is in the midst of a six, going on seven, quarter recession. Moreover, its economic contraction places it firmly within the periphery, so it is on tap to begin receiving German money after Merkel wins a third term in September. Good times for Croatia.
Spanish NPLs are actually much worse than official figures indicate. Spanish banks have been using cheap money to roll over bad loans rather in essence doubling down on bad bets. The bad loans are not just a consequence of Spain’s burst property bubble. All varieties of loans are performing badly as Spain’s depression wears on. Spanish banks have not received their last bailout.
Goldbugs do not enjoy the cold hard truth of a burst bubble as indicated by some of the comments that I received. Don’t be mad at me. I only call them like I see them. Still mad? Maybe this news will make it better. The chart above shows that short interest in gold is at record highs, and this usually signals a rally.