Google Website Translator Gadget

Search This Blog

Loading...

Wednesday, August 10, 2011

Which foreign entities are major holders of U.S. debt?

Debt that is privately held. Of particular interest today are the trends in debt that is privately held. Interest paid on this debt also adds to government spending. This category can be further subdivided into the following holders of U.S. Treasury securities:

Depository institutions
U.S. savings bonds
Pension funds – private
Pension funds – state and local governments
Insurance companies
Mutual funds
State and local governments
Foreign and international institutions
Other investors
Here’s a chart to show you what the breakdown of privately-held debt looks like.

Chart 1

2

The breakdown of privately held debt indicates that as of December 2005, more than half of total privately-held U.S. Treasury securities were owned by foreign and international entities (51%), followed by state and local governments (12%).

How has the breakdown of privately held debt changed over time?

As shown in Chart 2, since 1995 the share of debt owned by foreign investors has grown from one-fifth to roughly half of total private holdings.

Chart 2
chart 2


Which foreign entities are major holders of U.S. debt?

The U.S. dollar is an international reserve currency. Most of the world’s official reserves are held in U.S. dollars. 6 Also, because of its relative safety, foreign investors (both government and private) may choose to hold assets denominated in dollars, such as U.S. Treasury securities, to diversify their portfolios. Central banks or other monetary authorities (often called “official” foreign entities) may hold foreign exchange reserves—such as dollars—in order to influence the value of their domestic currency in the foreign exchange market. 7

The Office of Management and Budget states that, at the end of 2005, “[f]oreign central banks owned 63 percent of the Federal debt held by foreign residents; private investors owned nearly all the rest”. 8 The official foreign holdings of specific countries is a “well-guarded secret,” 9 but overall foreign holdings (that is, official foreign holdings plus holdings from private foreign investors) are tracked by the Treasury, and are displayed in Chart 3.

Chart 3

chart 3

Debt that is privately held. Of particular interest today are the trends in debt that is privately held. Interest paid on this debt also adds to government spending. This category can be further subdivided into the following holders of U.S. Treasury securities:

Source : Federal Reserv Bank of S. Francisco

http://www.f-secure.com/en/web/home_global/protection/free-online-tools/free-online-tools

 

No comments:

Blog Archive

Ob1kenobi's shared items

google analytics