The myth that China owns The US

Discussion in 'Politics' started by AK Forty Seven, Feb 3, 2012.


    Biggest Holders of US Government Debt

    As the U.S. government spends an unprecedented amount of money to fix the economy, there is an equally great need to raise the cash to pay for it. This is accomplished through borrowing, whereby Uncle Sam sells Treasury securities of varying maturity.

    For investors, government bills, notes and bonds are considered safe because they have a guaranteed rate of return, based on faith in future U.S. tax revenues. The government has been partially funding operations via Treasury securities for decades.

    This borrowing adds to the national debt, which has recently surpassed $15 trillion and is rising every second. The amount of debt is quickly approaching the federal debt ceiling, a legal limit to borrowing that currently stands at $16.4 trillion.

    Much of that debt is held by private sector, but about 40 percent is held by public entities, including parts of the government. Here's who owns the most. Foreign countries listed include private and public investors, according to monthly U.S. Treasury data.

    1. Federal Reserve and Intragovernmental Holdings

    U.S. debt holdings: $6.328 trillion

    That’s right, the biggest single holder of U.S. government debt is inside the United States and includes the Federal Reserve system and other intragovernmental holdings. Of this number, The Fed's system of banks owns approximately $1.65 billion in U.S. Treasury securities (as of January 2012), while other U.S. intragovernmental holdings - which include large funds such as the Medicare Trust Fund and the Social Security Trust Fund - hold the rest.

    In the monthly Treasury bulletin, both are combined into one category and the total accounts for a stunning $6.328 trillion in holdings as of September 2011 (the most recent number available). The amount is an all-time high as the Federal Reserve continues to expand its balance sheet, partially to purchase U.S. government debt securities. The Social Security Trust fund is required by law to invest in securities where the principal and interest is guaranteed by the Federal government.

    About a decade ago, the total government holdings were "only" $2.5 trillion.

    U.S. debt holdings: $1.132 trillion

    The largest foreign holder of U.S. Treasury securities, China currently has $1.132 trillion in American debt, although it is down from all time highs of $1.173 trillion in July 2011. For more on China and currency, see CNBC Explains.

    2. China

    U.S. debt holdings: $1.132 trillion

    The largest foreign holder of U.S. Treasury securities, China currently has $1.132 trillion in American debt, although it is down from all time highs of $1.173 trillion in July 2011. For more on China and currency, see CNBC Explains.

    3. Other Investors/Savings Bonds

    U.S. debt holdings $1.107 trillion

    With the most recent numbers from June 2011, this extremely diverse group includes individuals, government-sponsored enterprises, brokers and dealers, bank personal trusts, estates, savings bonds, corporate and noncorporate businesses for a total of $1.107 trillion.

    Although the level of debt held in U.S. savings bonds has remained basically constant since 2000, the broad category of "other" investors has nearly quadrupled since reaching a four-year low in December 2007.

    4. Japan

    Photo: APU.S. debt holdings: $1.038 trillion

    One of the U.S.'s largest trade partners, Japan is also one of the U.S.'s largest debt holders, currently owning $1.038 trillion in Treasury securities.

    5. Pension Funds

    U.S. debt holdings: $842.2 billion

    Pension funds control large amounts of money, reserved for personal retirements, and thus are obligated to make relatively safe investments. This group, which includes private and local government pension funds, holds $842.2 billion in U.S. debt. The private pension fund category also includes U.S. Treasury securities held by the Federal Employees Retirement System Thrift Savings Plan G Fund.

    6. Mutual Funds

    U.S. debt holdings: $653.5 billion

    According to the Federal Reserve, mutual funds hold the sixth-largest amount of U.S. debt compared to any other group, although mutual fund holdings have diminished by more than $105 billion since December 2008. Including money market funds, mutual funds and closed-end funds, this group of investments managed about $653.5 billion in U.S. Treasury securities as of June 2011, which are the most recent numbers available.

    7. State and Local Governments

    U.S. debt holdings: $484.4 billion

    U.S. state and local governments have nearly a half-trillion dollars invested in American debt, according to the Federal Reserve. The level of investment has remained stable since 2006, moving within the range of $484 billion and $576 billion. The current debt holdings, however, represent the lowest aggregate level for state and local governments since December 2005, when they stood at $481.4 billion.

    8. The United Kingdom

    U.S. debt holdings: $429.4 billion

    The U.K. currently holds $429.4 billion in U.S. debt, but the country's investment has fluctuated dramatically during the past two years. Now at its all-time high (and rapidly increasing), British holdings were as low as $55 billion in June 2008.

    9. Depository Institutions

    U.S. debt holdings: $284.5 billion

    As of June 2011 (the most recent numbers available), the Federal Reserve Board of Governors lists depository institutions as holding about $284.5 billion in U.S. debt.

    This group includes commercial banks, savings banks and credit unions. In 2011, its holdings more than tripled from the 2008 low of $105 billion. Between June and September 2011, holdings for depository institutions fell by nearly $44 billion.

    10. Insurance Companies

    tU.S. debt holdings: $250.1 billion

    According to the Federal Reserve Board of Governors, insurance companies hold $250.1 billion in Treasury securities. This group includes property-casualty and life insurance firms.
  2. I get so tired of hearing we owe China so much money when we owe them less then 8 % of our debt
  3. Tsing Tao

    Tsing Tao

    The only people who say China owns the US are the uninformed and uneducated.

    What is far, far more scary is that the Federal Reserve is the #1 owner of the debt. That shows you just how far they have gone in their monetization efforts. It's shocking.
  4. +1
  5. Epic


    Actually, that is one of the main points that I criticize Romney on. He is smart enough to know that China only owns a small fraction of our debt, and that is why he is taking such a hard line stance on forcing China into compliance.

    But then at the same time he makes statements like,"My test for the federal government is this: is this program so critical, so important that it’s worth borrowing money from China to pay for it."

    I'm sure that line goes over well in focus groups and that is why he uses it, but it is completely disconnected with reality.
  6. I'm sure Tinfoil would call that a "conspiracy theory" as well. He was busy telling the board that there was great "investment interest" and no need for the Fed to continue its monetization efforts, LOL.

    Just about as stupid and ill informed as his latest prediction about the debt/GDP at year end.

    btw, that little twat has me on ignore, so if you want him to read this, you'll have to quote me.
  7. 377OHMS


  8. Ricter


    Can I get you to quote me, in another thread, when I point out that pspr is being a coward by taking shots at me from behind the safety of ignore?


    Edit: this started out as an excellent thread with great replies.
  9. Maverick74


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  10. jem


    monetizing the debt is debasing the dollar.
    it would probably be better if china owned the debt.
    #10     Feb 3, 2012