Demons & Dialog

Exposing hidden news, history, & the new world order

Foreign ownership of U.S. Debt

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A traditional defense of the national debt is that Americans “owe the debt to themselves”, but that is becoming increasingly less accurate. The US debt in the hands of foreign governments was 25% of the total in 2007[35], virtually double the 1988 figure of 13%.[36] Despite the declining willingness of foreign investors to continue investing in US-dollar–denominated instruments as the US Dollar has fallen in 2007,[37] the U.S. Treasury statistics indicate that, at the end of 2006, foreigners held 44% of federal debt held by the public.[38] About 66% of that 44% was held by the central banks of other countries, in particular the central banks of Japan and China. In total, lenders from Japan and China held 47% of the foreign-owned debt.[39] This exposure to potential financial or political risk should foreign banks stop buying Treasury securities or start selling them heavily was addressed in a recent report issued by the Bank of International Settlements which stated, “‘Foreign investors in U.S. dollar assets have seen big losses measured in dollars, and still bigger ones measured in their own currency. While unlikely, indeed highly improbable for public sector investors, a sudden rush for the exits cannot be ruled out completely.” [40]

In 2006, the central banks of Italy, Russia, Sweden, and the United Arab Emirates announced they would reduce their dollar holdings slightly, with Sweden moving from a 90% dollar-based foreign reserve to 85%. [41] On May 20, 2007, Kuwait discontinued pegging its currency exclusively to the dollar, preferring to use the dollar in a basket of currencies.[42] Syria made a similar announcement on June 4, 2007.[43]

A list of the foreign owners of U.S. Treasury securities is listed by the U.S. Treasury:[39]

Major foreign holders of United States Treasury Securities

Foreign owners of US Treasury Securities
Nov 2008 Oct 2008 Nov 2007
Nation billions of dollars percentage
Mainland China 681.9 22.10% 652.9 21.57% 458.9 19.65%
Japan 577.1 18.70% 582.0 19.23% 589.6 25.25%
United Kingdom 360.0 11.67% 357.2 11.80% 174.1 7.46%
Caribbean banking centers 220.8 7.16% 219.3 7.25% 108.0 4.63%
Oil exporters 198.0 6.42% 187.6 6.20% 138.7 5.94%
Brazil 129.6 4.20% 134.5 4.44% 121.7 5.21%
Russia 78.1 2.53% 80.9 2.67% 33.5 1.43%
Luxembourg 75.0 2.43% 81.4 2.69% 67.9 2.91%
Hong Kong 66.0 2.14% 65.2 2.15% 51.7 2.21%
Switzerland 63.0 2.04% 61.2 2.02% 38.1 1.63%
Norway 59.1 1.92% 50.5 1.67% 27.6 1.18%
Taiwan 43.3 1.40% 39.1 1.29% 37.1 1.59%
Germany 43.3 1.40% 42.9 1.42% 38.6 1.65%
Singapore 37.4 1.21% 32.6 1.08% 40.2 1.72%
Ireland 35.2 1.14% 29.0 0.96% 17.5 0.75%
Thailand 35.1 1.14% 34.8 1.15% 27.5 1.18%
Mexico 34.6 1.12% 33.1 1.09% 31.9 1.37%
Turkey 28.7 0.93% 27.6 0.91% 25.6 1.10%
Korea 28.6 0.93% 32.1 1.06% 37.8 1.62%
Canada 17.2 0.56% 18.6 0.61% 24.0 1.03%
India 16.2 0.52% 12.2 0.40% 14.8 0.63%
Egypt 15.1 0.49% 15.0 0.50% 10.6 0.45%
Italy 14.7 0.48% 14.0 0.46% 15.5 0.66%
Chile 14.6 0.47% 14.9 0.49% 8.5 0.36%
Netherlands 12.9 0.42% 13.0 0.43% 14.2 0.61%
Poland 12.6 0.41% 11.4 0.38% 11.1 0.48%
Belgium 12.2 0.40% 12.8 0.42% 14.2 0.61%
Sweden 11.0 0.36% 11.5 0.38% 14.1 0.60%
All Other 164.3 5.32% 159.5 5.27% 142.3 6.09%
Grand Total 3085.9 3026.7 2335.0

Statistics and comparables

  • The national debt equates to $30,400 per person U.S. population, or $60,100 per head of the U.S. working population,[45] as of February 2008.
  • In 2003 $318 billion was spent on interest payments servicing the debt, out of a total tax revenue of $1.95 trillion– that is, 16.3% of total tax revenue.[46]
  • Total U.S. household debt, including mortgage loan and consumer debt, was $11.4 trillion in 2005. By comparison, total U.S. household assets, including real estate, equipment, and financial instruments such as mutual funds, was $62.5 trillion in 2005.[47]
  • Total U.S Consumer Credit Card revolving credit debt was $937.5 billion in November 2007.[48]
  • Total third world debt was estimated to be $1.3 trillion in 1990.[49]
  • The U.S. balance of trade deficit in goods and services was $725.8 billion in 2005.[50]
  • The global market capitalization for all stock markets was $40 trillion in September 2008.[51]
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Written by Michael Cooper

February 15, 2009 at 1:34 am

Posted in Uncategorized

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