The Biggest Holders of US Government Debt

1. Federal Reserve and US Intragovernmental Holdings

That’s right, the biggest holder of US government debt is the United States itself. The Federal Reserve system of banks and other US intragovernmental holdings account for a stunning $4.806 trillion in US Treasury debt. And with recent announcments from the Fed, potentially another $1 trillion may be added to its balance sheet... About a decade ago, the total government holdings were only $2.5 trillion.



2. Mutual Funds

According to the Federal Reserve, mutual funds hold the second largest amount of US debt compared to any other group. Including money market funds, mutual funds and closed-end funds, this group of investments manages approximately $769.1 billion of US Treasury securities.

3. China (Mainland)

The buzz word in the market for US debt of recent has been China. The world’s most populous country is also the largest and most important international buyer of US debt. From September 2008 to January 2009, China raised its stake by over $120 billion. Standing at $739.6 billion in January, China’s holdings have skyrocketed from $492.6 billion from a year earlier. Hong Kong, which is not included in China\'s total, holds an additional $71.7 billion.

4. Japan

Another major US trade partner, Japan holds a huge amount of the country’s debt, with a stunning $634.8 billion. As recently as January 2008, Japan held the more US debt than any other country, but currently holds the #2 spot, as far as foreign governments are concerned.

5. State and Local Governments

US state and local governments have over a half-trillion dollars invested in American debt, according to the Federal Reserve. The level of investment has remained very stable over the past three years, moving within the range of $516.9 billion and $550.3 billion from 2006 to 2009.

6. Pension Funds

Pension funds control large amounts of money, reserved for personal retirements, and thus are obligated to make relatively safe investments. This group includes both private and local government pension funds, totaling $456.4 billion. The private pension fund category also includes US Treasury securities held by the Federal Employees Retirement System Thrift Savings Plan G Fund.

7. Other Investors

Although the most recent numbers for this category are from September 2008, this extremely diverse group includes individuals, government-sponsored enterprises, brokers and dealers, bank personal trusts, estates, corporate and non-corporate businesses for a total of $413.2 billion.

8. Oil Exporters

Big oil means big money... and big investment into US debt. Included in the group of oil exporters are Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates, Algeria, Gabon, Libya, and Nigeria. The group combines for a total of $186.3 billion, up from $140.8 billion one year earlier.

9. Caribbean Banking Centers

The US Treasury identifies this group as institutions in the Bahamas, Bermuda, the Cayman Islands, Netherlands Antilles, Panama and the British Virgin Islands. Holdings recently hit $176.6 billion, up from $109.2 billion in January 2008.

10. Brazil

The South American economic giant has $133.5 billion in holdings, according to the Treasury. Brazil’s holdings of US debt have been relatively stable over the past year, with a high of $158 billion in June, and a low of $127 billion in December.

11. Insurance Companies

According to the Federal Reserve Board of Governors, insurance companies hold $126.4 billion in Treasury securities. This group includes property-casualty and life insurance firms.