Jan.31, 2008
CNN has just made a fuss about the fact that the Chinese hold close to 400 billion of the almost 9 billion dollars of American debt. But if one looks at offcial data as of Nov. 2007 reproduced below on who actually owns US debt, that is, has loaned money to the US treasury, we find that foreigners own around 27 % of the debt and the Chinese own some $386 billion or much less than 10 %of total US debt. Great Britain owns almost as much 315 billion, Japan much more 581 billion and even Canada holds $29 billion. A much larger holder of the American debt is the US government itself including the US federal reserve and American private citizens and pension funds.It would be quite simple if the the US had an aversion to allowing foreigners to holding this large a portion( 27 %) of the debt to reduce it by having the Fed enter the treasury bill markets and redeem some of the holdings. Simply lowering interest rates will result in less debt being held by foreigners. For lower interest rates bids up the price of the security and makes it attractive to sell rather than hang on to. this is a normal part of regular debt management that the Fed and Treasury regularly conduct.
Once again media hysteria is overblown.
MAJOR FOREIGN HOLDERS OF TREASURY SECURITIES
(in billions of dollars)
HOLDINGS 1/ AT END OF PERIOD
Nov Oct Sep Aug Jul Jun May Apr Mar Feb Jan Dec Nov
Country 2007 2007 2007 2007 2007 2007 2007 2007 2007 2007 2007 2006 2006
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Japan 580.9 591.7 581.9 585.8 610.6 612.9 615.0 614.6 611.4 616.4 627.2 622.9 615.9
China, Mainland 386.8 387.0 395.6 399.1 407.9 405.2 407.5 414.2 420.0 416.0 401.0 396.9 393.8
United Kingdom 2/ 315.6 295.5 265.0 242.9 209.6 192.1 169.5 135.4 147.9 121.6 104.0 92.6 76.1
Oil Exporters 3/ 127.6 130.5 126.0 123.6 123.5 122.1 121.1 112.0 112.5 110.5 111.7 110.2 106.4
Brazil 120.6 112.8 109.4 106.7 104.7 93.7 81.6 79.7 69.7 60.7 53.7 52.1 51.0
Luxembourg 75.0 70.0 65.0 63.8 64.2 62.6 62.2 61.8 61.8 59.8 59.4 60.0 60.5
Carib Bnkng Ctrs 4/ 72.1 70.2 63.7 68.4 35.3 42.8 47.2 75.6 79.9 65.6 68.0 72.3 86.7
Hong Kong 54.8 54.4 55.7 56.3 59.0 60.5 58.6 56.3 58.5 57.3 54.6 54.0 51.1
Taiwan 49.9 53.6 52.7 52.3 57.4 57.5 57.4 59.2 58.1 57.5 59.3 59.4 59.5
Korea 44.1 43.3 45.7 48.9 50.7 50.0 52.1 54.1 57.9 56.9 62.3 66.7 64.5
Germany 41.4 44.2 44.2 44.7 44.0 48.3 51.4 49.8 47.6 47.9 49.8 46.0 45.6
Singapore 37.2 35.8 33.6 34.8 33.3 33.0 34.4 32.1 28.8 31.2 29.9 31.3 30.9
Mexico 34.8 33.2 32.7 32.9 37.6 36.6 35.5 35.5 35.3 35.0 36.6 34.9 38.6
Switzerland 32.0 31.7 30.9 31.3 31.1 32.2 31.9 32.3 32.9 32.7 33.7 34.3 35.6
Canada 29.3 21.6 23.3 24.9 29.2 30.5 33.6 29.8 31.5 30.1 28.4 26.9 27.2
Thailand 24.7 20.0 21.8 20.1 19.7 17.8 18.7 16.8 17.8 16.8 16.6 16.9 16.1
Turkey 24.0 26.5 26.6 27.6 26.9 27.1 27.0 26.2 27.6 25.4 25.0 23.0 23.4
Netherlands 18.9 19.5 19.8 21.3 20.3 21.2 20.0 21.3 21.4 21.5 20.1 20.7 20.5
Italy 15.0 13.6 12.9 12.7 13.4 13.5 13.4 13.3 13.9 13.4 13.6 13.2 16.0
France 14.8 14.7 13.3 16.8 21.3 20.9 20.9 19.8 20.8 23.1 27.9 26.4 30.4
Russia 14.7 14.9 13.0 13.1 17.1 14.7 11.8 7.7 7.4 8.1 8.5 7.0 7.0
Sweden 14.6 15.0 15.3 16.2 16.1 15.7 15.4 14.8 14.9 14.9 14.0 12.0 11.9
Ireland 13.7 13.2 12.5 13.0 11.8 12.0 12.0 8.5 11.7 12.5 12.3 11.6 14.8
Poland 13.6 12.3 13.2 13.0 13.7 12.9 11.8 12.2 12.2 12.7 12.5 13.9 13.9
India 13.6 13.7 9.6 10.9 12.9 12.8 15.3 20.0 20.1 19.5 15.8 14.6 13.9
Belgium 10.9 11.3 11.2 11.2 12.1 11.9 12.1 12.9 12.3 12.9 12.3 13.6 13.0
Israel 10.5 10.2 11.1 11.6 11.3 12.4 13.8 13.8 14.1 13.4 12.5 12.3 11.7
All Other 145.6 136.8 132.6 114.9 105.9 118.7 133.8 136.7 146.7 149.8 149.9 157.2 161.1
Grand Total 2336.4 2297.3 2238.4 2218.9 2200.6 2191.5 2185.0 2166.7 2194.8 2143.3 2120.6 2103.1 2097.0
Of which:
For. Official 1449.4 1444.1 1438.0 1425.4 1451.3 1442.9 1448.2 1458.2 1465.8 1451.3 1448.7 1449.0 1452.3
Treasury Bills 185.1 180.2 178.1 179.8 176.0 160.7 172.5 178.0 194.9 181.8 181.4 176.8 186.2
T-Bonds & Notes 1264.3 1263.9 1259.9 1245.5 1275.2 1282.1 1275.7 1280.3 1270.9 1269.5 1267.3 1272.2 1266.1
Department of the Treasury/Federal Reserve Board
January 16, 2008
1/ Estimated foreign holdings of U.S. Treasury marketable and non-marketable bills, bonds, and notes
reported under the Treasury International Capital (TIC) reporting system are based on annual
Surveys of Foreign Holdings of U.S. Securities and on monthly data.
2/ United Kingdom includes Channel Islands and Isle of Man.
3/ Oil exporters include Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar,
Saudi Arabia, the United Arab Emirates, Algeria, Gabon, Libya, and Nigeria.
4/ Caribbean Banking Centers include Bahamas, Bermuda, Cayman Islands, Netherlands Antilles and Panama.
Beginning with new series for June 2006, also includes British Virgin Islands.
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