“All these top executives, Indonesians and others, started asking, ‘What do they really do?’ ” Mr. Lam said. “They bought because the next company did.”
Some experts say that with Asia’s phenomenal economic growth, savings are piling up so quickly that those funds will inevitably start flowing again to the United States at a fast clip. (The Chinese economy grew 23 percent in dollar terms last year.)
“The interest for the moment is depressed, but the trend is, we have a lot of savings in Asia and this is a bargain time” for assets in the United States, said Paul Tang, the chief economist at the Bank of East Asia in Hong Kong.
For now, though, Asian interest in American assets is wilting, a trend that seems to have started over the summer.
Little-noticed data released by the Treasury Department on Tuesday showed that a sharp shift in international capital movements began in July. Private investors pulled a net $92.9 billion out of the United States, after putting $46.8 billion into American securities in June.
Many investors in Asia think that Asian economies will bounce back from the current global economic downturn faster than the American economy, said Henry Lee, the managing director of the Hendale Group, a well-known Hong Kong investment advisory firm. So they are putting their money in Asian companies.
“When the dust settles, I think Asia will come out ahead of the U.S.,” he said.
Central banks, mainly Asian, did continue buying American securities in July. But they did so at a slower pace than usual. They made net purchases of $18.2 billion, compared with an average monthly purchase of $22.3 billion in the first half of this year, according to the latest Treasury data.
The central banks also changed the allocation of their purchases. They bought short-term Treasury bills while slowing their purchases of longer term Treasury bonds and American corporate bonds. And they abruptly switched from being large buyers of bonds from government-sponsored enterprises, like Fannie Mae and Freddie Mac, to becoming net sellers — one of many factors that contributed to the Bush administration’s decision to put Fannie Mae and Freddie Mac into conservatorship.
Advice For Investors
If cash is king during the current global financial crisis, then Asian governments and financial institutions are emperors. China’s central bank alone has $1.8 trillion in foreign reserves. Those reserves grew $280.6 billion in the first half of this year — a pace of $64 million an hour.
Americans have a huge stake in what China does with that money. Foreign cash coming into the United States to buy American assets holds down interest rates by making plenty of money available for the federal government to borrow to cover its budget deficit, and for consumers to borrow so that they can afford imported cars, DVD players and other goods.
Commerce Department data released on Wednesday showed that the nation’s current-account deficit, the broadest measure of trade in goods and services, had a deficit of $183.1 billion in the second quarter.