By Paul Toscano
Updated 31 Jan 2012
Biggest Holders of US Gov't Debt
As the U.S. government spends an unprecedented amount of money to fix the 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, government bills, notes and bonds are considered safe because they have a guaranteed rate of return, based on faith in future U.S. tax revenues. The government has been partially funding operations via Treasury securities for decades.
This borrowing adds to the national debt, which has recently surpassed $15 trillion and is rising every second. The amount of debt is quickly approaching the federal debt ceiling, a legal limit to borrowing that currently stands at $ 16.4 trillion.
Much of that debt is held by private sector, but about 40 percent is held by public entities, including parts of the government. Here's who owns the most. Foreign countries listed include private and public investors, according to monthly U.S. Treasury data.
U.S. debt holdings: $113.9 billion
Switzerland's holdings of U.S. debt reached a high of $147.5 billion — or about 28% of the country's GDP — in August 2011, but has dropped in recent months to $113.9 billion. The country's holdings have surpassed those of Hong Kong, Russia and Canada in the past several years.
U.S. debt holdings: $149.6 billion
Taiwan's holdings of U.S. debt have remained relatively steady over the last year, but in the past two years it has surpassed both Russia and Hong Kong in total holdings. To date, Taiwan holds $149.6 billion in Treasury securities, compared with Russia's $89.7 billion. Russia's holdings have been rapidly shrinking as the country diversifies.
13. Caribbean Banking Centers
U.S. debt holdings: $185.3 billion
The U.S. Treasury identifies this group as institutions in the Bahamas, Bermuda, the Cayman Islands, Netherlands Antilles, Panama and the British Virgin Islands. Holdings are currently listed at $185.3 billion, up from $106.6 billion in June 2008, but it remains off the group's high of $213.6 billion in March 2009.
U.S. debt holdings: $206.4 billion
The South American economic giant has $206.4 billion in holdings, according to the Treasury. Brazil’s investment into U.S. debt has been fluctuating slightly in the past two years, with current holdings under the high of $211.4 billion in May 2011.
11. Oil Exporters
U.S. debt holdings: $232 billion
Big oil means big money ... and big investment into U.S. debt. Included in the group of oil exporters are Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates, Algeria, Gabon, Libya and Nigeria. The group holds a total of $232 billion in U.S. debt, within the range of the $204 billion to $236 billion it has maintained during the past year.
10. Insurance Companies
U.S. debt holdings: $250.1 billion
According to the Federal Reserve Board of Governors, insurance companies hold $250.1 billion in Treasury securities. This group includes property-casualty and life insurance firms.
9. Depository Institutions
U.S. debt holdings: $284.5 billion
As of June 2011 (the most recent numbers available), the Federal Reserve Board of Governors lists depository institutions as holding about $284.5 billion in U.S. debt.
This group includes commercial banks, savings banks and credit unions. In 2011, its holdings more than tripled from the 2008 low of $105 billion. Between June and September 2011, holdings for depository institutions fell by nearly $44 billion.
8. The United Kingdom
U.S. debt holdings: $429.4 billion
The U.K. currently holds $429.4 billion in U.S. debt, but the country's investment has fluctuated dramatically during the past two years. Now at its all-time high (and rapidly increasing), British holdings were as low as $55 billion in June 2008.
7. State and Local Governments
U.S. debt holdings: $484.4 billion
U.S. state and local governments have nearly a half-trillion dollars invested in American debt, according to the Federal Reserve. The level of investment has remained stable since 2006, moving within the range of $484 billion and $576 billion. The current debt holdings, however, represent the lowest aggregate level for state and local governments since December 2005, when they stood at $481.4 billion.
6. Mutual Funds
U.S. debt holdings: $653.5 billion
According to the Federal Reserve, mutual funds hold the sixth-largest amount of U.S. debt compared to any other group, although mutual fund holdings have diminished by more than $105 billion since December 2008. Including money market funds, mutual funds and closed-end funds, this group of investments managed about $653.5 billion in U.S. Treasury securities as of June 2011, which are the most recent numbers available.
5. Pension Funds
U.S. debt holdings: $842.2 billion
Pension funds control large amounts of money, reserved for personal retirements, and thus are obligated to make relatively safe investments. This group, which includes private and local government pension funds, holds $842.2 billion in U.S. debt. The private pension fund category also includes U.S. Treasury securities held by the Federal Employees Retirement System Thrift Savings Plan G Fund.
U.S. debt holdings: $1.038 trillion
One of the U.S.'s largest trade partners, Japan is also one of the U.S.'s largest debt holders, currently owning $1.038 trillion in Treasury securities.
3. Other Investors/Savings Bonds
U.S. debt holdings $1.107 trillion
With the most recent numbers from June 2011, this extremely diverse group includes individuals, government-sponsored enterprises, brokers and dealers, bank personal trusts, estates, savings bonds, corporate and noncorporate businesses for a total of $1.107 trillion.
U.S. debt holdings: $1.132 trillion
The largest foreign holder of U.S. Treasury securities, China currently has $1.132 trillion in American debt, although it is down from all time highs of $1.173 trillion in July 2011. For more on China and currency, see CNBC Explains.
1. Federal Reserve and Intragovernmental Holdings
U.S. debt holdings: $6.328 trillion
That’s right, the biggest single holder of U.S. government debt is inside the United States and includes the Federal Reserve system and other intragovernmental holdings. Of this number, The Fed's system of banks owns approximately $1.65 trillion in U.S. Treasury securities (as of January 2012), while other U.S. intragovernmental holdings - which include large funds such as the Medicare Trust Fund and the Social Security Trust Fund - hold the rest.
In the monthly Treasury bulletin, both are combined into one category and the total accounts for a stunning $6.328 trillion in holdings as of September 2011 (the most recent number available). The amount is an all-time high as the Federal Reserve continues to expand its balance sheet, partially to purchase U.S. government debt securities. The Social Security Trust fund is required by law to invest in securities where the principal and interest is guaranteed by the Federal government.
About a decade ago, these total holdings in this category were "only" $2.5 trillion.