Who are the Caribbean bond buyers?

Discussion in 'Economics' started by texrex2002, Jun 7, 2009.

  1. report after report, I see huge US treasury bond holdings in the Caribbean.


    Who is it? Is it the fed in disguise? Is it SPV's of the major ibanks?

    We all know it's not dreadlocked Caribbean coconut rum drinking homies in flip flops buying these....
  2. Caribbean-domiciled hedge funds/mutual funds, banks & other large investors.

    (Cayman, Bermuda, Bahamas, BVI, etc)
  3. Thanks for the link. A couple of interesting stats in there; the most interesting for me being ~$3T in deposits in Swiss banks and ~$2T in Cayman Is. banking centers.

    Also interesting that with 2/3's of the deposits of the swiss banks, Cayman "banks" own 3x as many treasury bonds. This piques my interest in 2 ways:
    - what are the swiss banks holding that are not treasuries?
    - Why are Cayman banks holding so many?

    I wonder if the US govt has to tread lightly with the Cayman "banks," since they have the threat of dumping treasuries into the market. Given that Antiqua Grand Cayman, etc., don't have a currecy to protect, it's almost like they're in a position to manipulate our monetary policy. China or Japan couldn't apply that lever, since their currency would shoot up and ruin their economy. Cayman banknig centers don't have that problem (don't most of those islands use USD anyway?). Not that it would be locals making thse decisions anyway.

    There must be some sort of tacit approval from the fed/treasury? (although some will claim the fed is made up of member banks that are at the steering wheel of the $2T in the Cayman "banks").

    I'm a little surprised to hear so little about this. You cant trade more than $1000 in cash for a cashier's check at Walmart, or walk across the border with more than $10k, but you can have $2T in bonds all in one place and in the control of folks whose motives may not align with the US's. Not saying that it should be outlawed or anything (definitely not suggesting that), but it seems we focus our effort and attention on the wrong thing or at the wrong level to counter perceived risk. But then maybe we're all too captured by American Idol or swine flu to notice, ask or make a stink about it.
  4. Daal


    Caribbean sources are mostly hedge funds investing/trading US securities