Amazing Stats: % of U.S. Debt Held By Foreigners Keeps Growing – Here's Who

Lorimer Wilson June 8, 2012 Comments Off on Amazing Stats: % of U.S. Debt Held By Foreigners Keeps Growing – Here's Who 3,474 Views

Over the years foreigners have been buying more and more U.S. debt and now amounts to 33% of the total which is up from “just” 27% at this time 4 years ago and less than 15% only 20 years ago. However, given the dire state of U.S. finances it makes one wonder how much longer this trend will continue and what the consequences will be when the U.S. nolonger has a ready buyers to subsidize their excessive ways. Let’s take a look at which countries and entities hold the U.S. debt and the extent to which it has changed over the years. Words: 480

The above is an introduction by Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!) and www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive eyes) to an article* written by Katchum (http://katchum.blogspot.ca) which can be found below.

Below is a list (fromCNBC) of the major holders of U.S. debt at the end of 2011:

Social Security Trust Fund: $US 2.67 trillion
U.S. Federal Reserve: $US 1.659 trillion
China: $US 1.169 trillion
Savings Bonds & Other Investors: $US 1.102 trillion
Japan: $US 1.083 trillion
Pension Funds: $US 903.4 billion
Mutual Funds: $US 797.9 billion
State and Local Governments: $US 444.6 billion
Medicare Trust Funds: $US 324.57 billion
Depository Institutions: $US 286.3 billion
Oil Exporters: $US 254.5 billion
Insurance Companies: $US 253.7 billion
Brazil: $US 237.4 billion
Carribean Banking Centers: $US 224.8 billion (hedge funds)
Taiwan: $US 184.4 billion

= Total of $US 11.6 trillion of the entire $US 15.7 trillion public debt.

Foreign holders of U.S. debt are given in this table 1 (also below):

Table 1: Major Holders of U.S. Treasury Securities

We can see that over the months that foreigners are buying more and more debt, rising from $US 4477.6 billion in March 2011 to $US 5117.6 billion today.

In March 2011, total U.S. public debt was $US 14.2 trillion, today it’s $US 15.7 trillion.
So over the course of 1 year, the U.S. hasn’t accumulated much of its own debt in percentage terms. From 68% ((14.2-4.4776)/14.2) in March 2011 to 67% ((15.7-5.1176)/15.7) today.

When we look at a longer term (November 2007). We have $US 9.1 trillion of total debt, of which $US 2.3 trillion is held by foreigners. Which leaves 9.1 – 2.3 = 6.8 trillion, held by the U.S. So 6.8/9.1 = 75% is held by the U.S.

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So we can conclude that over the course of the years, foreigners have accumulated larger percentages of U.S. debt. You could say that foreigners are subsidizing the United States.

I have done the calculation on other time stamps using these sites (Foreign Treasury Holdings and Total Public Debt):

Nov 2007: 75% held by U.S.
Mar 2008: 73% held by U.S.
Nov 2008: 71% held by U.S.
March 2009: 70% held by U.S.
March 2010: 69% held by U.S.
March 2011: 68% held by U.S.
March 2012: 67% held by U.S.

I came up with this chart. Mathematicians call this a hyperbole.

Chart 1: Debt Held by U.S.

However, it doesn’t look like foreign interest will go away. If we look at 1970 untill 2010 we get this picture.

Chart 2: Debt held by Foreigners

I’m wondering how much higher this chart can go until foreigners start to dump U.S. treasury debt.*http://katchum.blogspot.ca/2012/06/who-is-holding-us-bonds.html

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