Creditors dump record amount of Treasuries. What to do...

Creditors Dump Record Amount of Treasuries Here's What to Do... We've been regularly warning you that interest rates are headed higher and bond prices lower. Ben Bernanke started the bond sell-off in May when he introduced "tapering" to the Wall Street vocabulary and warned that the Fed could start reducing its $85 billion of monthly bond purchases at one of its "next few meetings." One group of investors who paid great heed to that warning was foreign investors. In June, foreign investors dumped $5.2 billion of Fannie Mae, Freddie Mac, and Ginnie Mae bonds, $5 billion in corporate bonds, and $40.8 billion in US Treasury bonds-all part of the $66.9 billion in sales of other long-term US securities. That is the biggest monthly dumping of Treasuries by foreign creditors since 1977! So which of our country's creditors are doing the most selling? None other than our two biggest creditors, China and Japan. China and Japan sold a combined $40 billion of US debt last month, but that's a drop in the bucket. China and Japan hold $1.27 trillion and $1.08 trillion of US debt respectively, and more selling will lead to even more bond losses. If you're an income investor, you need to adjust to the "new normal" of rising interest rates. That's what our latest letter does for you. To find out more, click here now. Best wishes, Mauldin Economics Copyright 2013 Mauldin Economics http://www.mauldineconomics.com/opt-out