Biggest Holders of US Government 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.a-M+O"C0[,c&fFor 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. ji+M"~'s"{
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 $16.4 trillion. T U)[| A$hV/|}*ps
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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.f`!vDX}
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1. Federal Reserve and Intragovernmental Holdings[/b]*wf*kC1LK(w$za$f
U.S. debt holdings: $6.328 trillionB|D$] z U EZ
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That’s right, the biggest single holder of U.S. government debt is the Federal Reserve system. The Fed's system of banks and other U.S. intragovernmental holdings accounted for a stunning $6.328 trillion in U.S. Treasury debt in Spetember 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.8d'^/T)ON(D
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About a decade ago, the total government holdings were "only" $2.5 trillion.x:pONCb{M
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2. China[/b]
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[b][img=200,0]http://l.yimg.com/bt/api/res/1.2/BfucAF8w4Eunohzmz9w6qA--/YXBwaWQ9eW5ld3M7cT04NTt3PTIwMA--/http://l.yimg.com/os/284/2012/02/01/slide2-SS-US-debt-holders2-china-jpg_195516.jpg[/img]Photo: DAJ RM | Getty Images[/b]U.S. debt holdings: $1.132 trillion
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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.GyS3X k:}.v'G