Episode #298: Why The World Still Needs Dollars

Episode 298 centered around why the US Dollar is still useful as a reserve currency, which lead me to the obvious question of “who owns what?” There has been a lot of talk lately about how much debt the US has and whether particular foreign bodies own too much debt (i.e. China). This chart seeks to provide an answer to where our debt is and to give some context by showing the same statistics for 2002.

Notes:

Caribbean (which is misspelled in the graphic, and will be corrected shortly!) stands for “Caribbean Banking Centers”. It’s a total of holdings in areas such as the Bahamas, the Cayman Islands, etc.
OPEC is of course the Organization of Petroleum Exporting Countries, but the debt in that column is not held by the organization itself, rather by its member countries.
US Public refers to the total amount of securities held by all private domestic entities, such as banks, corporations, personal investments, etc. The majority of privately held securities are in marketable securities.
US Gov’t refers to intra-governmental loans, which are when the the federal government borrows from other government trusts, such as Social Security and Medicare. The majority of intra-governmental loans are in non-marketable securities.
Note that the total foreign-held debt is less than 33% of the total debt.
Despite greatly exaggerated reports of China’s stake in the US debt, China holds only around 25% of foreign holdings, and less than 10% of total debt.

Episode #298: Why The World Still Needs Dollars

Episode 298 centered around why the US Dollar is still useful as a reserve currency, which lead me to the obvious question of “who owns what?” There has been a lot of talk lately about how much debt the US has and whether particular foreign bodies own too much debt (i.e. China). This chart seeks to provide an answer to where our debt is and to give some context by showing the same statistics for 2002.

Notes:

  • Caribbean (which is misspelled in the graphic, and will be corrected shortly!) stands for “Caribbean Banking Centers”. It’s a total of holdings in areas such as the Bahamas, the Cayman Islands, etc.
  • OPEC is of course the Organization of Petroleum Exporting Countries, but the debt in that column is not held by the organization itself, rather by its member countries.
  • US Public refers to the total amount of securities held by all private domestic entities, such as banks, corporations, personal investments, etc. The majority of privately held securities are in marketable securities.
  • US Gov’t refers to intra-governmental loans, which are when the the federal government borrows from other government trusts, such as Social Security and Medicare. The majority of intra-governmental loans are in non-marketable securities.
  • Note that the total foreign-held debt is less than 33% of the total debt.
  • Despite greatly exaggerated reports of China’s stake in the US debt, China holds only around 25% of foreign holdings, and less than 10% of total debt.

Source NPR