Friday, March 16, 2018

We Had A Huge Trade Surplus In January!!

Wow! We had a huge trade surplus in January!

Well, not by popular definition, but certainly by your investment consultant's 😇.

In January, foreigners bought $63.2 billion worth of U.S. securities -- more than half being the U.S. stocks in your portfolio by the way -- while we bought a paltry $1.1 billion worth of foreign securities. 

My goodness, on an annualized basis that's a 700+ billion dollar surplus! How much does Washington claim our trade deficit is?

So, folks, please, worry not when you buy that whatever at the best price you can get from wherever it's made. If it happens to be a foreign land, you're providing the capital that foreign investors use to boost the value of the stocks in your portfolios. No kidding!! And then of course whoever sold them the stocks now has the cash -- that you bought what you wanted with -- to do something else with.

That's how capital flows throughout the world. And that's absolutely not something we want governments fooling with!

Treasury International Capital
Released On 3/15/2018 4:00:00 PM For Jan, 2018
Prior Prior Revised Actual
Foreign Demand for Long-Term U.S. Securities

Foreigners were once again major investors in the U.S. stock market during January, helping to drive a large $62.1 billion of net long-term investment inflow in the month. Foreign accounts, almost entirely private ones, invested a net $34.5 billion into equities for what is the fifth straight positive month and one of the largest on record.
Foreign accounts were, in contrast, small net sellers of corporate bonds but were major buyers of government agency bonds and also Treasury bonds. Country data show a sizable $16.7 billion decline in Chinese holdings of Treasuries, to $1.168 trillion in January, with Japan in second place just more than $100 billion behind with a $4.3 billion rise to $1.066 trillion. 
U.S. accounts were small net buyers of foreign securities, at $1.1 billion in the month, which for the report's headline is subtracted from total foreign buying of U.S. securities of $63.2 billion. Large financial inflows help offset the nation's growing trade and government deficits.

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