Central Banks Sell Most U.S. Bonds Since 2007

International central banks are selling the most Treasuries since the credit crisis began just as institutional investors load up on U.S. government bonds according to Businessweek.

The Federal Reserve said its holdings of U.S. government debt on behalf of central bankers and institutional investors outside America has plunged $76.5 billion in the last seven weeks, the most since August 2007. At the same time, bond mutual funds are adding Treasuries, banks have increased their holdings 45 percent in the past five years and the Fed has added $656 billion to its balance sheet this year.

Rather than a referendum on the U.S.’s $1.3 trillion budget deficit and rising debt burden, sales by foreign policy makers may have more to do with supporting their currencies after the Brazilian real weakened 9.8 percent and Taiwan’s dollar lost 4.4 percent against the U.S. dollar...

Read more at http://www.businessweek.com/news/2011-10-17/central-banks-sell-most-u-s-bonds-since-2007-as-funds-buy.html