When you hear or read about big holders of US Treasuries, China is usually the first name that comes up. Of course, for a long time, Japan was the leading foreign holder of our government bonds, but now both China and Japan have to step aside. When it comes to US Treasuries, the big dog is now–wait for it–the Federal Reserve.
I’m not kidding. Check out this chart:
Source: Zero Hedge
The column in red shows Treasury securities held by the Federal Reserve and compares its portfolio to those of other big ones such as China, Japan and the United Kingdom, which are in blue. As you can see, the Feds are #1, closely-followed by China and Japan.
Should make for interesting conversations when Fed Chair Ben Bernanke and Treasury Secretary Tim Geithner get together.
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I’m pretty sure China’s Hong Kong (despite a separate economy under “one country, two systems” owns about $300 billion, which puts China (+Hong Kong) on top with over $1 trillion dollars.
lol — That’s possible, but unlikely. As you can see from the chart, the last column is down to $145 billion so the $300 billion you think Hong Kong holds seems unlikely. However, it is likely that some of the UK’s $459 billion could be Chinese holdings.
Kurt Brouwer is a fee-only financial advisor with three decades of experience. He is the chairman and co-founder of Brouwer & Janachowski, LLC. Kurt has written books, articles and hundreds of blog posts on mutual funds, ETFs and other investment topics. E-mail: kurt.brouwer *at* gmail.com.
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