Ireland : buyer of US debt

gerhard dengler

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It appears that after Japan and China, Ireland is the largest foreign sovereign holder of America government issue debt, according to American Treasury Report.



http://ticdata.treasury.gov/Publish/mfh.txt


If you examine the figures, it would appear that most other countries who hold American debt have either reduced that holding or have not increased the holding that they possess - except Ireland.

Can anyone explain why Ireland is increasing it's holding of American treasuries? (Ireland's holding of American debt increased by $41 billion between January 2016 and January 2017).
 


fat finger

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It appears that after Japan and China, Ireland is the largest foreign sovereign holder of America government issue debt, according to American Treasury Report.



http://ticdata.treasury.gov/Publish/mfh.txt


If you examine the figures, it would appear that most other countries who hold American debt have either reduced that holding or have not increased the holding that they possess - except Ireland.

Can anyone explain why Ireland is increasing it's holding of American treasuries? (Ireland's holding of American debt increased by $41 billion between January 2016 and January 2017).

Please explain the question a bit more, is this debt held by Irish government or by private companies registered in Ireland?
 

HarshBuzz

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It's not 'Ireland' (i.e. the State) that is a massive holder of US government bonds.

It's 'Irish companies', and specifically Irish-domiciled funds based in the IFSC, many of whom are required to have a certain % of their assets held in such securities.

That's all. No great mystery, just another of those anomalies of our economy.
 

GDPR

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It appears that after Japan and China, Ireland is the largest foreign sovereign holder of America government issue debt, according to American Treasury Report.



http://ticdata.treasury.gov/Publish/mfh.txt


If you examine the figures, it would appear that most other countries who hold American debt have either reduced that holding or have not increased the holding that they possess - except Ireland.

Can anyone explain why Ireland is increasing it's holding of American treasuries? (Ireland's holding of American debt increased by $41 billion between January 2016 and January 2017).

I believe that the "Irish" holders of this US debt are "shadow bank" shelf companies that are fronting for multinational corporations. The dodgy \ criminal nature of the Irish shadow banking system has recently been highlighted by Bloomberg. Turns out that one of our Shadow Bankers raised over 200 million dollars for a Russian bank just days before it went bankrupt - in the full knowledge that the money would never be repaid and that it was defrauding its investors.

Irish special purpose vehicles like the one that issued the notes are unregulated companies used to borrow money on behalf of corporations around the world. Critics say the entities obscure risk and sometimes fails to adequately vet the beneficiaries.

“Why is a Russian bank in the middle of nowhere raising dollars through an Irish SPV using brokerages in Hong Kong?” said Shaen Corbet, a finance professor at Dublin City University. “Ireland says it’s locked down on this kind of stuff, but it hasn’t really.”

Ireland is one of the world’s hubs for SPVs, entities typically with no employees that offer tax and regulatory benefits to the corporations using them. The Central Bank of Ireland began amassing data on SPVs in late 2015 as part of a global push to better understand the risks posed by non-bank financial firms, or shadow banks, Bloomberg reported last year. The regulator found hundreds of entities with 324 billion euros of assets, including about 54 billion euros in Russia, according to an October report.



https://www.bloomberg.com/news/articles/2017-03-17/russian-bank-raised-millions-in-irish-shadows-as-collapse-loomed
 

GDPR

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It's not 'Ireland' (i.e. the State) that is a massive holder of US government bonds.

It's 'Irish companies', and specifically Irish-domiciled funds based in the IFSC, many of whom are required to have a certain % of their assets held in such securities.

That's all. No great mystery, just another of those anomalies of our economy.
The Irish Central Bank has no control whatsoever over these Shadow Banks, and cannot compel them to do anything.
 

The Field Marshal

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Now that the president of the USA Donal Trump has committed murder in Syria maybe its time for the irish govt to review its attitude toward these financial arrangements.
 

HarshBuzz

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The Irish Central Bank has no control whatsoever over these Shadow Banks, and cannot compel them to do anything.
Could you name some of these shadow banks you refer to?

It's always interesting for me to learn new things, even after 20 years working in finance. Especially when coming from one as informed as yourself.
 

GDPR

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Could you name some of these shadow banks you refer to?

It's always interesting for me to learn new things, even after 20 years working in finance. Especially when coming from one as informed as yourself.

I hate to break it to you, but 20 years working behind the counter of a pawn broker shop may not have prepared you for this.

http://hb.betterregulation.com/external/Data Gaps and Shadow Banking Profiling Special Purpose Vehicles Activities in Ireland.pdf

https://www.bloomberg.com/news/articles/2016-02-24/russian-bank-collapse-shines-light-on-risks-in-irish-shadows

Irish
 

fat finger

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It's not 'Ireland' (i.e. the State) that is a massive holder of US government bonds.

It's 'Irish companies', and specifically Irish-domiciled funds based in the IFSC, many of whom are required to have a certain % of their assets held in such securities.

That's all. No great mystery, just another of those anomalies of our economy.

Fair enough. But as a tax payer, what dangers do such funds expose me to that might not be loudly explained by their executives or by our own government?
 

HarshBuzz

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Fair enough. But as a tax payer, what dangers do such funds expose me to that might not be loudly explained by their executives or by our own government?
As an Irish tax payer? None. If such a fund goes kablammo (technical finance term), the Irish tax payer should not care one jot.

Apart from maybe a few IFSC suits who might lose their job.
 

gerhard dengler

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It's not 'Ireland' (i.e. the State) that is a massive holder of US government bonds.

It's 'Irish companies', and specifically Irish-domiciled funds based in the IFSC, many of whom are required to have a certain % of their assets held in such securities.

That's all. No great mystery, just another of those anomalies of our economy.
Ah, that answers my question.

Thanks.
 

GDPR

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Fair enough. But as a tax payer, what dangers do such funds expose me to that might not be loudly explained by their executives or by our own government?
The problem is that the Central Bank regulated retail banks are very much tied in with the Shadow Banking system - in terms of being used as clearing houses, sourcing liquidity, etc. A collapse of the Shadow Banks here in Ireland may pull down the retail banks also. Already hedge funds have been bailed out with public money in the USA because of the systemic implications of allowing them to fail. That Irish Times report I posted suggests that the SB system in Ireland is ten times the size of the rest of the Irish economy combined - we cannot be so naive as to imagine that has no implications for us. If the Shadow Banks fell, they would drag down the "best families" in Ireland - and that simply would not be allowed to happen - at least until Joe Public had given his last penny to rescue the situation. In short, the Shadow Banking system in Ireland is too big to be allowed to fail.
 

fat finger

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The problem is that the Central Bank regulated retail banks are very much tied in with the Shadow Banking system - in terms of being used as clearing houses, sourcing liquidity, etc. A collapse of the Shadow Banks here in Ireland may pull down the retail banks also. Already hedge funds have been bailed out with public money in the USA because of the systemic implications of allowing them to fail. That Irish Times report I posted suggests that the SB system in Ireland is ten times the size of the rest of the Irish economy combined - we cannot be so naive as to imagine that has no implications for us. If the Shadow Banks fell, they would drag down the "best families" in Ireland - and that simply would not be allowed to happen - at least until Joe Public had given his last penny to rescue the situation. In short, the Shadow Banking system in Ireland is too big to be allowed to fail.
This is what I feared. So why has not our Finance Minister, or indeed our Prime Minister, made very clear public statements, a five minute broadcast on RTE for example before the evening news, explaining exactly what they have allowed into our country and what will be the effects on each of us of such SPVs blowing up, it's almost like the Great Bailout simply never happened, as if such catastrophes are so unthinkable that the Finance Minister and Prime Minister have no contingency plans in place, the very fact of their continued silence on this matter should have all voters shivering with worry
 

GDPR

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This is what I feared. So why has not our Finance Minister, or indeed our Prime Minister, made very clear public statements, a five minute broadcast on RTE for example before the evening news, explaining exactly what they have allowed into our country and what will be the effects on each of us of such SPVs blowing up, it's almost like the Great Bailout simply never happened, as if such catastrophes are so unthinkable that the Finance Minister and Prime Minister have no contingency plans in place, the very fact of their continued silence on this matter should have all voters shivering with worry
The problem is the Shadow Banking system is very complex - far too complex for most politicians to understand, and certainly too complex for the likes of Noonan to make any public statements about. "Shadow Banking" is a scary title, but it's also a comforting title as it gives the impression that this system is one thing - but its far from one thing. I don't think everything the hedge funds, for example, do is bad by any means. I'm not against derivatives like options, swaps, etc. But Ireland has gotten itself a very bad reputation as a place bankers come to avoid the law. And they are avoiding the law because they want to take risks that the law considers dangerous to society as a whole. It's because the Irish government thinks it's "smart" to have these kind of operations going on in Ireland that we got into such a terrible mess in 2008. And, to be quite honest, it looks like we are being set up for a far bigger fall in the not too distant future. I also think it's extraordinary ominous that the likes of Goldman Sachs are taking Irish home mortgages off the books of Irish retail banks. This looks very much like a trend that can only be disastrous, i.e. the Shadow Banking system coming out of the shadows and eating up the functions of the retail banks.
 
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comet

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It is a scam, a few years ago Belgium was one of the biggest buyers of U.S. debt but it wasn`t them it was the U.S. buying its own debt. This to give the air of people having confidence in the U.S.D. and the U.S. they don`t. When a country is spending $57,000,000 an hour maintaining its empire there is only one outcome - bankruptcy
 
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It is a scam, a few years ago Belgium was one of the biggest buyers of U.S. debt but it wasn`t them it was the U.S. buying its own debt. This to give the air of people having confidence in the U.S.D. and the U.S. they don`t. When a country is spending $57,000,000 an hour maintaining its empire there is only one outcome - bankruptcy
Russia - China - Iran are not using US $ for Oil trades......................... that starts to become painful for the US after a while.

Saddam threateed it, Gadaffi threatened it................................ coincidence not.
 

HarshBuzz

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Russia - China - Iran are not using US $ for Oil trades......................... that starts to become painful for the US after a while.

Saddam threateed it, Gadaffi threatened it................................ coincidence not.
The US dollar should by this logic be falling against the other major currencies.

It is rising.
 
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The US dollar should by this logic be falling against the other major currencies.

It is rising.
US Debt is 104% of GDP and it isn't going down.

Trump gave buoyancy to markets and they riding on that at the moment. market sentiment has little to do with reality which is why tech companys worth billions when making no money.

Facebook has shown how it lied in the impact of the money it was charging its advertisers, this not unsurprisingly was glossed over but this just tells you that the advertisers which is their income paying too much for little impact.
Once they stop spending the whole thing comes crumbling down.
US Federal Govt is Bankrupt.
 


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