

Infographic: Which Countries Own America’s Debt? - cwan
http://computationallegalstudies.com/2009/12/07/which-countries-own-americas-debt/

======
czstrong
China has been buying the U.S.'s debt since the mid 90's, when they pegged
their currency to the dollar, in order to maintain their peg and keep the yuan
from appreciating. From 2005-2008 they abandoned their peg for a managed float
and let their currency appreciate about 21% due to pressures from the U.S.
because their currency was artificially undervalued which negatively affects
the global trade balance and the global economy. In 2008, however, they went
back to the peg to protect their export sector and to stabilize their economy
and have remained with the peg since.

China has actually dug themselves into a large hole with their monetary
policy. The yuan is grossly undervalued and needs to appreciate, however, if
they let it appreciate, their U.S. denominated holdings, mostly U.S. Treasury
Securities, currently valued at $2.4 trillion, will lose value. It is also in
their interest to keep buying our debt because it allows us to keep interest
rates down and consume more, and the U.S. is China's largest export market.
But on the other hand, if China tries to sell their securities, this will lead
to increased supply in the market which will drive down the price of the
securities, which will in turn decrease the value of their holdings.

The financial crisis has led to the depreciation of the dollar, and the yuan
along with it since it's pegged, compared to most other currencies. This has
greatly impacted the emerging and developed countries' economies that rely on
exports for growth because they simply cannot compete with China's
artificially low export prices.

This is an interesting issue and it will be interesting to see how it plays
out. To get a great summary of the current situation, this is a great, quick
read that sums it up nicely: <http://www.fas.org/sgp/crs/row/RS21625.pdf>

------
joshstaiger
Note that this graphic only accounts for ~25% of total US debt - the foreign-
held portion.

The majority is owned by US institutions (mostly the fed):

[http://en.wikipedia.org/wiki/File:Estimated_ownership_of_tre...](http://en.wikipedia.org/wiki/File:Estimated_ownership_of_treasury_securities_by_year.gif)

~~~
mjw
True, although when one part of the state prints money to "lend" to another
part of the state, I'm not sure how useful it is to include that as part of a
total "debt" figure. It's just an artefact of the way the US chooses to
implement its monetary policy.

Any economists feel like weighing in on this?

~~~
oneplusone
The Fed is a private institution, though a small stake is owned by the US
government. So it's not really one part of the state lending it to another
part of the state.

~~~
DougBTX
<http://www.federalreserve.gov/generalinfo/faq/faqfrs.htm#5>

"It is not 'owned' by anyone and is 'not a private, profit-making
institution'. Instead, it is an independent entity within the government,"
however for our purposes this quote is probably more relevant, "the Federal
Reserve must work within the framework of the overall objectives of economic
and financial policy established by the government."

So, independent, but founded to enact government policy.

~~~
mati
While your summary is technically correct, just look at any of your bills.
What does it say? "Federal Reserve Note". Your money is not printed by your
government. With all the implications that carries, including your government
lending it from FED on interest.

------
tjic
The title of the image says "who owns America's debt" (the total amount of
bonds we've sold), but the caption, and the dollar amount, suggest that it's
actually about the deficit (the total amount - in a given year - by which
government expenditures exceed the amount of money taxed from citizens).

------
mojaam
how about a better link/image? [http://www.usfst.com/media/media-
news/infographics/usdebt.pn...](http://www.usfst.com/media/media-
news/infographics/usdebt.png)

~~~
adammichaelc
... or maybe an accurate one?
[http://upload.wikimedia.org/wikipedia/commons/1/17/Estimated...](http://upload.wikimedia.org/wikipedia/commons/1/17/Estimated_ownership_of_treasury_securities_by_year.gif)

------
nudist
Wow, Japan has more US debt than I thought. Anyone know how that happened? US
companies don't tend to build stuff in Japan, do they?

~~~
hristov
Remember how before all of our consumer electronics became Chinese they used
to be Japanese. Also remember how most cars that work in america are also
Japanese. We have been running a huge trade deficit with Japan since the 80s.

In fact I am surprised that China overtook Japan already.

~~~
m0th87
They've overtaken Japan only in deficit (i.e. the derivative of debt); Japan
could very well still have more debt.

------
Asa-Nisse
According to this USA owes me $6.5, I accept cash, visa and hot chicks.

------
reedlaw
This chart seems to be off. China only holds over $2b? According to this:
[http://upload.wikimedia.org/wikipedia/commons/a/aa/Foreign_H...](http://upload.wikimedia.org/wikipedia/commons/a/aa/Foreign_Holders_of_United_States_Treasury_Securities.svg)
China holds almost $800b of US Treasury Securities.

~~~
m0th87
The chart is for deficit, not debt (see the inky dinky text at the bottom of
the infographic)

~~~
ojbyrne
I don't think that's correct. The text at the top refers to "Holders of
Treasury Securities" and the legend on the side says each $ equals 10m of
Treasury Securities. I.e. debt.

In addition the graphic seems totally screwy. There are 32 rows of 35 dollar
signs (total of 1120) which means that $11.2 billion are represented. Which
bears no resemblance to either the number at the top nor the one at the
bottom.

In addition, the number at the top ($3.4 billion) seems quite small in
relation to the one at the bottom.

Seems screwed up.

~~~
m0th87
Perhaps it's just a completely fucked graphic then? If it takes this many
HNers to try to decipher its meaning, I doubt there's any hope for the average
population.

------
sh1mmer
How much of the debt of these countries does the US own?

