Foreign ownership of Our Debt

Map of countries by foreign currency reserves and gold minus external debt based on 2009 data from CIA Factbook

The US debt in the hands of foreign governments was 25% of the total in 2007,^[19] virtually double the 1988 figure of 13%.^[20] Despite the declining willingness of foreign investors to continue investing in US dollar denominated instruments as the US dollar fell in 2007,^[21] the U.S. Treasury statistics indicate that, at the end of 2006, non-US citizens and institutions held 44% of federal debt held by the public.^[22] About 66% of that 44% was held by the central banks of other countries, in particular the central banks of Japan and China. In May 2009, the US owed China $772 billion.^[23]
In total, lenders from Japan and China held 44% of the foreign-owned debt.^[24] This exposure to potential financial or political risk should foreign banks stop buying Treasury securities or start selling them heavily was addressed in a recent report issued by the Bank of International Settlements, which stated, "'Foreign investors in U.S. dollar assets have seen big losses measured in dollars, and still bigger ones measured in their own currency. While unlikely, indeed highly improbable for public sector investors, a sudden rush for the exits cannot be ruled out completely."^[25]
On May 20, 2007, Kuwait discontinued pegging its currency exclusively to the dollar, preferring to use the dollar in a basket of currencies.^[26] Syria made a similar announcement on June 4, 2007.^[27] In September 2009 China, India and Russia said they were interested in buying IMF gold to diversify their dollar-denominated securities.^[28] However, in July 2010 China's State Administration of Foreign Exchange "ruled out the option of dumping its vast holdings of US Treasury securities" and said gold "cannot become a main channel for investing our foreign exchange reserves" because the market for gold is too small and prices are too volatile.^[29]
The following is a list of the Foreign Owners of U.S. Treasury Securities as listed by the U.S. Treasury:^[24]

Leading Foreign owners of US Treasury Securities (July 2010)
Nation/Territory	billions of dollars	percentage
People's Republic of China (mainland)	846.7	20.8
Japan	821.0	20.2
United Kingdom	374.3	9.2
Oil exporters1	223.8	5.5
Caribbean Banking Centers2	150.7	3.7
Brazil	162.2	4.0
Hong Kong (Special Administrative Region)	135.2	3.3
Russia	130.9	3.2
Republic of China (Taiwan)	130.5	3.2
Grand Total	4065.8	100

¹Saudi Arabia, Venezuela, Libya, Iran, Iraq, the United Arab Emirates, Bahrain, Kuwait, Oman, Qatar, Ecuador, Indonesia, Algeria, Gabon, and Nigeria
²Bahamas, Bermuda, Cayman Islands, Netherlands Antilles, British Virgin Islands and Panama

19   ^ Just who owns the U.S. national debt? - Answer desk - MSNBC.com

20   ^ Amadeo, Kimberly. "The U.S. Debt and How It Got So Big". About.com. http://useconomy.about.com/od/fiscalpolicy/p/US_Debt.htm. Retrieved 2007-07-07.

21   ^ ParaPundit: Foreign Investment In US Declines With Dollar Decline

22   ^ Analytical Perspectives of the FY 2008 Budget

23   ^ "Retired Military Personnel". Patrick Air Force Base, Florida: The Intercom (publication of the Military Officers Association of Cape Canaveral). June 2009. pp. 4.

24   ^ ^{a b} Major Foreign holders of U.S. Treasury Securities (2008), U.S. Treasury Department.

25   ^ BIS says global downturn could be 'deeper and more protracted' than expected - Forbes.com

26   ^ Kuwait pegs dinar to basket of currencies - Forbes.com

27   ^ "Bloomberg.com: Worldwide". http://www.bloomberg.com/apps/news?pid=20601087&sid=ahGpyu4D9xBk&refer=worldwide. Retrieved 2007-11-04.

28   ^ The Associated Press. "IMF takes up gold sales to expand lending". http://www.google.com/hostednews/ap/article/ALeqM5gnGzlhHF6ANMbHrkPv0CNDKo5lJAD9APUM1G0. Retrieved 2009-09-19.

29   ^ "China won't dump US Treasuries or pile into gold". China Daily eClips. 2010-07-18. http://www.cdeclips.com/en/business/fullstory.html?id=47499#. Retrieved 2010-07-18.