TIC Data Shows Americans Not Big Buyers of Foreign Assets

There has been a great outcry that the Fed's signalling of QEII last Aug (Bernanke Jackson Hole) triggered large capital outflows from the US, driving the dollar down and overwhelming emerging market countries, forcing them to erect capital controls. The TIC data does not confirm that.

Not only did foreigners step up their purchases of US assets, but Americans were not big buyers of foreign securities. In September, the TIC indicates, Americans bought $10.4 bln of foreign stocks and bonds. This is in line with the average of the past 12-months (~$10.25 bln).

In terms of breakdown of stocks and bonds, it was roughly divided. Americans bought $5 bln of foreign bonds and $5.4 bln of foreign stocks. Over the last 12-months, Americans have bought a net $36.8 bln of foreign stocks and a net of $86.2 bln of foreign bonds. Although the details are not available, Americans typically have bought dollar-denominated bonds, but the flows into international bond funds suggest some attraction of local currency bonds.