Thursday, November 11, 2010

15 Top Owners Of Government Debt

Seal of the United States Department of the Tr...Image via Wikipedia

As the US government spends an unprecedented amount of money to fix the nation's 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, the government bills, notes and bonds are considered a safe financial product because they have a guaranteed rate of return, based on faith in future US tax revenues. The government has been partially funding operations via Treasury securities for decades.
This borrowing adds to the national debt, which has climbed to a staggering $13.72 trillion and is rising every day. 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.

15. Taiwan

US debt holdings: $130.2 billion
Taiwan's holdings of US debt have fluctuated between $120.5 billion and $152.4 billion over the past year.
To date, Taiwan holds $130.2 billion in Treasury securities, which is only $1.2 billion more than the next highest national debt purchaser, Russia, whose holdings stand at $129 billion.

14. Hong Kong

US debt holdings: $137.8 billion 
Hong Kong is one of the world's largest holders of US debt, although in 2010 the region has cut its holdings by approximately $10 billion from January levels.

13. Caribbean Banking Centers

US debt holdings: $159.1 billion 
The US Treasury identifies this group as institutions in the Bahamas, Bermuda, the Cayman Islands, Netherlands Antilles, Panama and the British Virgin Islands. Holdings are currently listed at $159.1 billion, up about $30 billion from a year earlier, but still off the group's high of $213.6 billion in March 2009.

12. Brazil

US debt holdings: $165 billion 
The South American economic giant has $165 billion in holdings, according to the Treasury. Brazil’s investment into US debt has been fluctuating slightly over the past two years, with current holdings testing the high of $170.8 billion hit in Feb 2010.

11. Oil Exporters

US debt holdings: $226.6 billion 
Big oil means big money... and big investment into US debt.
Included in the group of oil exporters are Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates, Algeria, Gabon, Libya, and Nigeria. The group combines for a total of $226.6 billion, which is a slight increase from the $190 billion to $220 billion range they have maintained in recent history.

10. Insurance Companies

US debt holdings: $260.6 billion 
According to the Federal Reserve Board of Governors, insurance companies hold $260.6 billion in Treasury securities. This group includes property-casualty and life insurance firms.

9. Depository Institutions

US debt holdings: $273.7 billion 
As of March 2010 (the most recent numbers currently available), the Federal Reserve Board of Governors lists depository institutions as holding approximately $273.7 billion in US debt. This group includes commercial banks, savings banks and credit unions and has nearly tripled from Q4 2008, when holdings stood at $105 billion.

8. United Kingdom

US debt holdings: $448.4 billion
Britain currently holds $448.4 billion in US debt. The country has been ramping up its debt in 2010, rising from $218.8 billion in January to $448.4 billion in the most recent numbers, which have them doubling in an 8 month span.

7. State and Local Governments

US debt holdings: $534.7 billion 
US state and local governments have over a half-trillion dollars invested in American debt, according to the Federal Reserve. The level of investment has remained very stable over the past three years, moving within the range of $534.7 billion and $550.3 billion from 2006 to 2009, and although the amount has been increasing, the total value of holdings are off the highs. However, this number does not include an additional $181.6 billion of holdings of treasury notes in state and local government pension funds.

6. Pension Funds

US debt holdings: $643.8 billion
Pension funds control large amounts of money, reserved for personal retirements, and thus are obligated to make relatively safe investments. This group includes both private and local government pension funds, totaling $643.8 billion. The private pension fund category also includes US Treasury securities held by the Federal Employees Retirement System Thrift Savings Plan "G Fund."

5. Mutual Funds

US debt holdings: $648.6 billion 
According to the Federal Reserve, mutual funds hold the fifth largest amount of US debt compared to any other group, although mutual fund holdings have diminished by nearly $120 billion since December 2008.
Including money market funds, mutual funds and closed-end funds, this group of investments manages approximately $648.6 billion of US Treasury securities as of March 2010, which are the most recent numbers available.

4. Japan

US debt holdings: $836.6 billion
A major US trade partner, Japan holds a huge amount of American debt, and has traditionally been one of the US's largest debt holders, currently owning $836.6 billion of treasury securities.

3. China

US debt holdings: $868.4 billion
The largest foreign holder of US Treasury securities, China currently holds $868.4 billion in American debt, although it is off the all time highs of $900.2 billion in April 2010.

2. Other Investors/Savings Bonds

US debt holdings $1.266 trillion
With the most recent numbers from June 2010, this extremely diverse group includes individuals, government-sponsored enterprises, brokers and dealers, bank personal trusts, estates, savings bonds, corporate and non-corporate businesses for a total of $1.266 trillion. Although the level of debt held in U.S. savings bonds has remained relatively constant since 2000, the broad category of "Other" investors has nearly quadrupled since reaching a four-year low in September 2007.

1. Federal Reserve and Intragovernmental Holdings

US debt holdings: $5.345 trillion
That’s right, the biggest holder of US government debt is actually within the United States. The Federal Reserve system of banks and other US intragovernmental holdings account for a stunning $5.345 trillion in US Treasury debt. This is the most recent number available (June 2010), and marks an all-time high.
About a decade ago, the total government holdings were "only" $2.5 trillion.


2 comments:

  1. To be honest Hong Kong IS Chinese- that puts China in the 1,006 B category.
    EXCELLENT article.
    Scary- isn't it?

    ReplyDelete
  2. @Janette, that's a good point. Why do these figures worry everyone but the people that work in Washington? I hope the new blood there will start to make some changes.

    ReplyDelete

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