Chinese banks own a lot of our debt?

[lateo]

I keep hearing this batted around but I haven't seen any links to this information.

Anyone have any?

[Kagemusha]

1. I don't have a link but...

They own a lot of the debt that is held in foreign hands and not, by, oh, say, THE SOCIAL SECURITY TRUST ADMINISTRATION, which is pretty damn considerable. Or by personal savings bond holders i.e. American citizens. Which is pretty damn considerable as well.

Not, mind you, that it would take a lot to make these bonds damn unprofitable if dumped en masse but, it would be mutually assisted suicide so the Chinese aren't likely to do this. It does make the US making moves to blackmail China into un-pegging its currency a bit interesting though.

[Anarcho-Socialist]

2. Here's an msnbc article I googled...

http://www.msnbc.msn.com/id/7080859/

Here's an extract:

"Though most Treasury debt is held by U.S. banks, institutional and individual investors, much of this paper is held by foreigners. The biggest chunk of cash from overseas, as of Sept. 2004, came from Japan -- something like $720 billion, or about 40 percent of the debt held outside the U.S. The next biggest lenders are China ($174.4 billion), Great Britain ($134.6 billion) and "Caribbean Banking Centers" ($100.3 billion) — which roughly translates as "people who don't want you to know who they are." "

[Anarcho-Socialist]

4. Here's another extract from the same source

Foreigners who lend us their money get paid interest, of course. (Otherwise, why would they give us the money?) Last year, the interest charges on the national debt came to $321,566,000,000 ($321.6 billion), or about $26.8 billion a month. Think of it as the monthly minimum on Uncle Sam's credit card.

And that's where the paper chase stops. Those overseas debt holders want real money — yours and mine — for those interest payments. Last year, interest on the national debt ate up more cash than the U.S. spent on the Departments of Agriculture ($71.7 billion); Education ($62.8 billion); Veterans Affairs ($59.6 billion); Transportation ($54.5 billion); Homeland Security ($26.7 billion); Energy ($20.0 million) or the Environmental Protection Agency ($8.3 billion) to name a few. Only Health and Human Services ($543.2 billion); Social Security ($530.2 billion) and Defense ($437.1 billion) get more. (For a breakdown of where your money went, see Page 5 of the Final Monthly Treasury Statementfor last year's spending.)

[LeftistGorilla]

3. one day they...

might want to collect...

[leveymg]

5. See, KarenasBlog for April 4

http://karenasblog.com/

Reader Contribution, IS THIS THE STUPIDEST THING SHRUB HAS EVER SAID?

CONSIDER THE FOLLOWING: Over time, the Asian exporting countries have been placing a big percentage of their exchange earnings into US Treasuries. The leader continues to be Japan, with China now the #2 foreign holder of US debt.

Reportedly, China is shifting its portfolio away from US investments, which include billions in real estate trusts and Federally backed loans. Fannie Mae and Freddie Mac are the focus of major accounting scandals, and the former lost five percent of its value Monday.
http://www.forbes.com/home/feeds/ap/2005/04/04/ap1923108.html
Shares of Fannie Mae tumbled Monday to their lowest intraday level in more than 10 years on a report that the mortgage financing company's chief regulator is looking into possible improper accounting of trusts it uses to sell mortgage-backed debt. Shares of Fannie Mae, a government-sponsored entity that buys mortgages from banks and then repackages and sells them as bonds called mortgage-backed securities, fell $2.68, or 5 percent, to $50.56 in midday trading, and was one of the New York Stock Exchange's biggest percentage losers and most active issues. The stock dropped to a new 52-week low of $49.75 earlier in the day, down about 30 percent since early January.

THE SAUDIS HAVE FLED U.S. BONDS
The Saudis and other Gulf oil exporters bailed out of U.S. Treasuries a long time ago, and aren't even on the list anymore.http://www.msnbc.msn.com/id/7294906 /Who holds U.S. Treasury securities as of January, 2005 Amount in billions $ Percentage of foreign-held Treasury debt Japan 701.6 36% Mainland China 194.5 10% United Kingdom 163 8% Caribbean Banking Centers* 92.5 5% Korea 67.7 3% *Bahamas, Bermuda, Cayman Islands, et al.(Source: US TREASURY DEPT)--------------------------------------------------------------
AND, LOOK WHERE THINGS STOOD TWENTY YEARS AGO:http://www.treas.gov/tic/shl94sum.html Table 5 Foreign Portfolio Investment in Long-Term SecuritiesTop 10 Investing Countries(Amounts in $ Billions)

Japan and the United Kingdom have maintained their positions as the top portfolio investing countries in U.S. securities. However, the rate of growth for Japan has decreased significantly. Between 1984 and 1989, Japanese holdings increased from $28 billion to $180 billion, or over 500%. Between 1989 and 1994 their holdings increased by only 28%.On the other hand, holdings of the Middle East Oil Exporting countries (Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates) decreased from $54 billion to $45 billion. In 1984, these countries together held 17% of foreign holdings of U.S. long-term securities. By 1994, their holdings represented less than 4% of the total held by foreigners. The Unknown line is largely Eurobonds held in bearer form for which no ownership information is available. The level of Eurobond holdings have increased significantly since the 1984 survey as the size and importance of the Eurobond market has increased.
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That giant popping sound you just heard was the real estate bubble.
The days of cheap and easy home equity credit just ended. Add this to skyrocketing energy costs, and we have a prescription for one hell of a long, hot summer. This would be the time that BushCo introduces its favorite randomizer -- war -- in hopes of distracting us and reshuffling the political deck. I'd bet anything on it.

# posted by karenasblog @ 9:46 AM