The above chart shows the foreign ownership of U.S. treasury securities (i.e. foreign ownership of the U.S. national debt). The total foreign ownership of U.S. treasuries was $3.077 trillion as of December 2008. Also, it should be noted that in 2008 China surpassed Japan as the largest foreign holder of U.S. treasury securities.
The large (and growing) foreign ownership of the U.S. national debt can be seen as both a positive and negative. First, foreign demand of our debt has helped provide for low borrowing costs (i.e. low interest rates). It also makes us more interdependent with these countries which can provide for a more stable world. However, on the downside, our economic security increasingly is being placed in foreign hands. For a full analysis on this topic you can read my article from March 2005 entitled The U.S. Current Account Deficit: Is Our Economic Health in Foreign Hands?
Data Source:
>U.S. Treasury Department, TIC Report
Note:
1 Caribbean Banking Centers include Bahamas, Bermuda, Cayman Islands, Netherlands Antilles, Panama, and BVI.
2 Oil exporters include Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, UAE, Algeria, Gabon, Libya, and Nigeria.
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