Posted by Joseph Y. Calhoun, III

International Capital flows were reported today for July:

WASHINGTON – The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for July 2009. The next release, which will report on data for August 2009, is scheduled for October 16, 2009.

Net foreign purchases of long-term securities were $15.3 billion.

• Net foreign purchases of long-term U.S. securities were $44.0 billion. Of this, net purchases by private foreign investors were $32.1 billion, and net purchases by foreign official institutions were $12.0 billion.
• U.S. residents purchased a net $28.8 billion of long-term foreign securities.

Net foreign acquisition of long-term securities, taking into account adjustments, is estimated to have been negative $7.4 billion.

Foreign holdings of dollar-denominated short-term U.S. securities, including Treasury bills, and other custody liabilities decreased $4.5 billion. Foreign holdings of Treasury bills increased $14.4 billion.

Banks’ own net dollar-denominated liabilities to foreign residents decreased $85.7 billion.

Monthly net TIC flows were negative $97.5 billion. Of this, net foreign private flows were negative $131.3 billion, and net foreign official flows were $33.8 billion.

Well, I guess it isn’t much of a mystery why the dollar is falling. Capital is flowing out of the US, particularly from private investors. If we were on a gold standard, gold would be flowing out and policy would have to change, but since we aren’t, the dollar falls. One other thing; the total inflow for long term securities was just $15.3 billion. Of that a full $8 billion was an inflow from France that I can’t explain. There must have been some corporate stock deal because we don’t usually see that kind of inflow from France. If anyone knows the source, please leave a note in the comments.