United States is the largest holder of its own debt

If you asked most people, whether in the know or not, who the largest holder of US debt is, most would say China or Japan. Many of you are probably reading this now thinking it is China. Here is the problem, the Federal Reserves and US Govt is the largest holders of US debt. Keep in mind, these numbers we in January, so they are much much higher now. The Federal Reserve has dramatically increased in US debt purchases.

Given that we are now having problem selling debt at the levels previous levels, much less the larger levels needed as govt expands spending, and the fact tax receipts by the US govt plummeted, we have large problems coming.

LARGEST HOLDERS OF UNITED STATES DEBT:

1. Federal Reserve and US Intragovernmental Holdings - $4.806 trillion
That’s right, 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 announcments from the Fed, potentially another $1 trillion may be added to its balance sheet... About a decade ago, the total government holdings were "only" $2.5 trillion.

2. Mutual Funds - $769.1 billion
According to the Federal Reserve, mutual funds hold the second largest amount of US debt compared to any other group. Including money market funds, mutual funds and closed-end funds, this group of investments manages approximately $769.1 billion of US Treasury securities.

3. China (Mainland) - $739.6 billion
The buzz word in the market for US debt of recent has been China. The world’s most populous country is also the largest and most important international buyer of US debt. From September 2008 to January 2009, China raised its stake by over $120 billion. 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.

4. Japan - $634.8 billion
Another major US trade partner, 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

5. State and Local Governments - $550.3 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 $516.9 billion and $550.3 billion from 2006 to 2009.

6. Pension Funds - $456.4 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 $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."

7. Other Investors - $413.2 billion
Although the most recent numbers for this category are from September 2008, this extremely diverse group includes individuals, government-sponsored enterprises, brokers and dealers, bank personal trusts, estates, corporate and non-corporate businesses for a total of $413.2 billion.

8. Oil Exporters - $186.3 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 $186.3 billion, up from $140.8 billion one year earlier

9. Caribbean Banking Centers - $176.6 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 recently hit $176.6 billion, up from $109.2 billion in January 2008.

10. Brazil - $133.5 billion
The South American economic giant has $133.5 billion in holdings, according to the Treasury. Brazil’s holdings of US debt have been relatively stable over the past year, with a high of $158 billion in June, and a low of $127 billion in December.

11. Insurance Companies - $126.4 billion
According to the Federal Reserve Board of Governors, insurance companies hold $126.4 billion in Treasury securities. This group includes property-casualty and life insurance firms.

12. United Kingdom - $124.2 billion
Britain currently holds $124.2 billion in US debt, but the number has fluctuated dramatically in the past year, ranging from $279 billion, but dropped to as little as $55 billion in the summer of 2008

13. Russia - $119.6 billion
Russia's investment in US debt has grown over 330 percent in the past 12 months, from $35.2 billion in January 2008 to $119.6 billion in January 2009.

14. Depository Institutions - $107.3 billion
As of the fourth quarter of 2008, the Federal Reserve Board of Governors lists depository institutions as holding approximately $107.3 billion in US debt. This group includes commercial banks, savings banks and credit unions.

15. Luxembourg - $87.2 billion
A country slightly smaller than Rhode Island currently holds $87.2 in US government debt. Over the past 12 months, Luxembourg’s holdings have ranged between $66.1 billion and $104.7 billion.

For the debt list: CNBC Link

Tax receipts plummeting: Article



[edit on 3-8-2009 by johnny2127]

"You owe me 5trillion $! Pay it up now freeloader!"

"Ok ok just give me a minute..."


And the rest of the world watches in awe at the guy with split personality talking to himself in public...

reply to post by muzzleflash


LOL, nothing quite like being able to loan yourself money.

Pretty staggering when we think about about China is our biggest foreign debt holder, AND the US holds nearly 5 times more of its own debt.

It's called QUANTITATIVE EASING - the UK does it as well - purchasing debt issued by government or financials.

Remember that this does NOT represent the Chinese reserves of US treasuries - they also accumulate it through exchange (trade). So this is NOT there total figure - it is around the 2 trillion mark.

Um, let's see. Borrow from Peter to pay Peter because Paul is in the hospital with an anurism and is going to be covered by National Health Care. Does Paul have a big Life Insurance policy? Can we pull the plug and collect under the new Health Care bill? No? Fudge!!
Who bought most of the 30 yr notes that were just on the market? Can you say US. I need a new financial advisor.

I do not understand. If you owe yourself money, why can't you just forgive yourself the debt and be done with it??

Originally posted by Jessicamsa
I do not understand. If you owe yourself money, why can't you just forgive yourself the debt and be done with it??

Notice it is the Federal Reserve, which is owned by a bunch of (many foreign) banks.

So we don't "owe ourselves money". We owe the banks and all their loans, credit cards.........

reply to post by wutone


In other words, the US government applied for some credit cards, and was approved. She then maxed them all out

Originally posted by wutone

Originally posted by Jessicamsa
I do not understand. If you owe yourself money, why can't you just forgive yourself the debt and be done with it??

Notice it is the Federal Reserve, which is owned by a bunch of (many foreign) banks.

So we don't "owe ourselves money". We owe the banks and all their loans, credit cards.........

I think that is exactly what is going to happen and all the bank and credit card debt will go away with it. It's called a fresh start or a jubilee. It's our only chance.

Originally posted by audas
It's called QUANTITATIVE EASING - the UK does it as well - purchasing debt issued by government or financials.

Remember that this does NOT represent the Chinese reserves of US treasuries - they also accumulate it through exchange (trade). So this is NOT there total figure - it is around the 2 trillion mark.

That was my first thought as well until I read and saw that is not just the central bank. That's the Federal Reserve, as well as other govt agencies not associated with quantitative easing. Keep in mind, the treasuries that the Fed DOES own for quantitative easing is money the treasury prints, AND then we also pay interest to the Fed for holding them. So in essence, its not the Fed's money, and then we still pay them the interest AS IF they had lent it to the US Govt. So ridiculous.

Originally posted by Jessicamsa
I do not understand. If you owe yourself money, why can't you just forgive yourself the debt and be done with it??

You do understand, coz that is almost exactly how the internal debt is being handled. You can owe yourself money by taking them from your saving account set up to buy something in the future. If you don't deposit the money back, you just delay the intended purchase. In the whole country scenario, the standard of living increases in much slower pace. With all the new technologies available, we still work 5 (!) days a week with no 4 working days on the horizon. The external debt is different and pretty much understood. The lender wants his or her money back eventually and the persistent requests to pay back can bankrupt you.

reply to post by stander


True. However, the other issue here is that govt purchases of treasuries is also masking weak treasury auctions right now. Monetizing the debt is a bad long term solution.

reply to post by johnny2127


Most people (who know anything about economics) when referring to China or Japan or Germany who ever else as "large holders of US Debt" refer to them first, as they are the foreign investors. By all technical means, they are the most important investors.

The US's debt to it's self is called Monetization.. basically a fancy word for "printing money" .. but not really printing money .. because only Congress can do that.. right? The debts, when matured are distributed into the Treasury or, if the economy can stand it, destroyed.

Mutual Funds (I.E. Bankers) would naturally be on the list, however it does not specify which bankers.. fund managers could be from the US. They could also be from the UK, France, Canada or anywhere else. Not all banks operating on American soil are in fact American.

And so China will remain the single largest owner of US Debt, as a singular Entity (which banks and funds are not singular entities but an economic classification)

Is the federal reserve U.S owned?

Many think not.

According to Wikipedia-

As of February 11, 2009 according to the Federal Reserve Bank of New York the list includes:

BNP Paribas Securities Corp.
Bank of America Securities LLC
Barclays Capital Inc.
Cantor Fitzgerald & Co.
Citigroup Global Markets Inc.
Credit Suisse Securities (USA) LLC
Daiwa Securities America Inc.
Deutsche Bank Securities Inc.
Dresdner Kleinwort Securities LLC.
Goldman, Sachs & Co.
Greenwich Capital Markets Inc.
HSBC Securities (USA) Inc.
J. P. Morgan Securities Inc.
Mizuho Securities USA Inc.
Morgan Stanley & Co. Incorporated
UBS Securities LLC.

Looks like there are huge amounts of capitol invested by British, German, Swiss and Japanese PRIVATE BANKS to me!

Are wutone and myself the only ones who have picked up on the real ownership of U.S debt?

Many of these banks are rumoured to be part of the international banking elite, which many people have connected to the NWO.

Seems fairly alarming to this observer.

And if true, would call into question the accuaracy of the thread title?

reply to post by Rockpuck


Except, remember that the Treasury still pays interest to the Federal Reserve when it wasn't their money used to buy the debt. Its an insane model. The Fed is privately owned, and has the power to decide how much monetizing is needed to keep the economy going. And of course the more they monetize the more money they make, so its an insane model. All the Fed has accomplished is to inflate bubbles, which end up bursting and causing massive collateral damage.

reply to post by the way


What you forget is that money used to buy the treasuries that the Fed owns is not money from those entities you listed. Its money printed by the treasury, given to the Fed and then turned right back around and given back to the US treasury to buy treasuries. These aren't investments from any bank or country you listed. But those banks and countries do make money from it as the US Govt pays interest to the Fed on the debt they hold even though they didn't buy them with their own money. Doesn't make sense huh?

Originally posted by johnny2127
reply to post by Rockpuck

 

Except, remember that the Treasury still pays interest to the Federal Reserve when it wasn't their money used to buy the debt. Its an insane model. The Fed is privately owned, and has the power to decide how much monetizing is needed to keep the economy going. And of course the more they monetize the more money they make, so its an insane model. All the Fed has accomplished is to inflate bubbles, which end up bursting and causing massive collateral damage.

The treasury doesn't really pay interest on the debts, aside from taking money out of circulation .. the Federal Reserve does not "Profit" from the Treasuries they purchase. They are a regulatory board, and cannot own in the sense a private entity can. The FED buying Tbills is in short Inflation, printing money, with an assurance program that the inflation is only temporary.

reply to post by johnny2127

But those banks and countries do make money from it as the US Govt pays interest to the Fed on the debt they hold even though they didn't buy them with their own money.

No, they don't.

reply to post by Rockpuck


Yes they do. I know we cant go back and forth on this. But the Fed isn't just a regulatory board. They are a for profit corporation. Not a govt agency, not a regulatory agency. A for profit bank.

Hey, I don't claim to be an expert on this by any stretch of the imagination!

My understanding is that the federal reserve is a private, unregulated, for profit organisation that is propped up by foreign investment and paid on the debt the U.S has.

The more in debt the U.S gets the more money they make.

Thats my understanding of it.

Feel free to correct me if thats wrong?