|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:
= 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):
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.
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.
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):
I came up with this chart. Mathematicians call this a hyperbole.
However, it doesn’t look like foreign interest will go away. If we look at 1970 untill 2010 we get this picture.
| 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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The developed economies of the world have opened the money spigots…[and this] massive money and credit creation is sitting in the banking system like dry tinder just waiting for a spark to set it ablaze. How quickly it happens is anyone’s guess, but once it does we are likely to be enveloped in a worldwide inflation unlike anything before ever witnessed. [Let me explain further.] Words: 625
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