America's Bankers

Some interesting info from a CNBC article titled "Biggest Holders of US Gov't Debt". Here is the way the article begins:
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 consdidered 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 is now above $11 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.
The list of our bankers is an interesting one that includes institutions, like commercial banks, savings banks and credit unions, that hold approximately $107.3 billion in US debt.. Mutual Funds carry a large part of the debt managing approximately $769.1 billion of US Treasury securities.The list also includes:
  • China: Standing at $739.6 billion in January, China’s holdings have skyrocketed from $492.6 billion from a year earlier. Hong Kong, which is not included in China's total, holds an additional $71.7 billion.
  • Japan holds a huge amount of the country’s debt, with a stunning $634.8 billion. As recently as January 2008, Japan held the more US debt than any other country, but currently holds the #2 spot, as far as foreign governments are concerned.
  • 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 $516.9 billion and $550.3 billion from 2006 to 2009.
  • Private and Local Government Pension Funds, totaling $456.4 billion. The private pension fund category also includes US Treasury securities held by the Federal Employees Retirement System Thrift Savings Plan "G Fund."
  • Oil Exporters like Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates, Algeria, Gabon, Libya, and Nigeria combines for a total of $186.3 billion, up from $140.8 billion one year earlier.
  • Caribbean Banking Centers hold $176.6 billion, up from $109.2 billion in January 2008.
  • Insurance Companies hold $126.4 billion in Treasury securities.
  • Other countries (Brazil, the United Kingdom, Russia and Luxembourg) hold between $600 and 700 billion in US debt.
An interesting fact is that the biggest holder of US government debt is the United States itself. The Federal Reserve system of banks and other US intragovernmental holdings account for a stunning $4.806 trillion in US Treasury debt. And with recent announcements from the Fed, potentially another $1 trillion may be added to its balance sheet.

1 comment:

  1. In other words ... the US tax-payers. Constitutionally, we ARE the US government (but don't tell the elite politicians in DC).

    This all makes me feel kind of sluggish, like I'm trying to walk in mud up to my knees.


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