MarketWatch reported, “Net long-term capital inflows fell to $65.1 billion in September from a revised $114.4 billion in August. August’s inflows had previously been reported as $116.8 billion, which was a record.
The net long-term capital inflows weren’t enough to cover the U.S. current account deficit, which has been running at about $70 billion a month.”
How will the US make up the shortfall? Is this a noisy data point, or a harbinger of things to come? Foreign central banks have been warning of their intent to diversify. Is this the beginning?
guy1 is probably right. lower oil sales means fewer petrodollars to recycle. As oil falls, our Treasury sales drop. Add to that reduced demand by China.
So how do we fund our budget without these purchases?