China now owns $1.16 trillion of U.S. debt

CBS/AP

(AP) WASHINGTON - China, the biggest buyer of U.S. Treasury securities, owns a lot more than previously estimated.

In an annual revision of the figures, the Treasury Department said Monday that China's holdings totaled $1.16 trillion at the end of December. That was an increase of 30 percent from an estimate the government made two weeks ago.

The government made the change to its monthly report based on more accurate information it obtains in an annual survey. That survey more does a better job of determining the actual owners of Treasury securities.

China was firmly in the top spot as the largest foreign holder of U.S. Treasury debt even before the revisions. But the big increase in Chinese holdings could ease fears that Chinese investors might begin dumping their U.S. holdings. Such a development could send U.S. interest rates rising. That would slow America's economic recovery and increase Washington's costs for financing the $14.3 trillion national debt.

China and Britain were the countries with the biggest revisions in the new report.

The amount of U.S. Treasury securities held by Britain fell to $272.1 billion in the new report. That's a drop of $269.2 billion from the last monthly report which put the Britain's holdings of U.S. debt at $541.3 billion. The holdings of the two countries often show big revisions when the annual report is released.

The reason for the change is that Chinese investors who purchase their Treasury securities in London are often counted as British investors. The more detailed annual report does a better job of tracking the countries in which investors reside as opposed to the location where investors make their purchases.

Even with the revision, Britain remained the third largest holder of U.S. Treasurys.

Japan had the second highest foreign holdings, totaling $882.3 billion at the end of December. The revision was only slightly below the original estimate.

The total foreign holdings of Treasury debt stood at $4.44 trillion at the end of December, according to the new report. That's up 1.5 percent from the estimate made two weeks ago. About two-thirds of U.S. Treasurys owned overseas are held by foreign governments and central banks.

The U.S. government is selling huge amounts of debt to finance record-high budget deficits. The Obama administration in its new budget released on Feb. 14 projected that this year's deficit will reach a record $1.65 trillion. It would be the third consecutive year the federal deficit has exceeded $1 trillion.

[honestabeandtruth]

Heroes Wanted
I have reached the ripe old age of forty-nine, living in what my parents and past presidents have called the greatest nation on earth. This nation, which has born some of the greatest leaders, George Washington, Thomas Jefferson, Abraham Lincoln, Franklin D. Roosevelt and others. While all certainly lived in different times with different challenges, there exists a common thread between them - they all led this country during troubled and turbulent times. In some instances when the very existence of this nation stood in the balance, or when the fate of the world depended upon whether good men were willing to stand on the wall as guardians of man's spirit to remain free. To be sure, while the threat to this Nation or world has changed, in each case, the character of each of these men was called to test and eventually measured in the fire of troubled times. In my eyes, they became known as Heroes, a person who, in the face of adversity and danger or from a position of weakness, displayed courage and the will to sacrifice for the greater good of this Nation or the world. Today, this great Nation is once again in danger. It is not a danger posed by another country or a maniacal leader bent on world domination, but this Nation's debt - a debt derived neither from Republicans nor Democrats alone, but by both parties' leadership.
What's the worst that can happen?
The worst scenario would be if international lenders begin to lose confidence in the United States' ability to meet its obligations. That could precipitate a debt crisis like those in Greece and Ireland, and there's no reason to assume that we're magically immune. We don't know what kind of havoc a debt crisis in the world's largest economy would create worldwide. Depending on timing and the relative stability of the rest of the world's economies, it is reasonable to assume it would trigger a global economic meltdown of proportions the world has never before experienced. We have one great advantage. Right now, investors worldwide still see the United States as one of the best places to invest their money by buying US treasury bonds. That means we still have time to make our own decisions about getting the budget on a more sustainable path. It will take years to solve the problem, but if investors see we're working on it, they're more likely to stick with the United States and keep buying our bonds. It was once said hope isn't a very good plan! I will take it further, to base the very survival of a nation and its future generations on the hope foreign governments, many potential adversaries, will continue to fund our politician's unethical ambitions and bloated government is pure fantasy.
We as a Nation are on the threshold of a new generation, potentially a generation of national greatness defined by debt. What will the legacy of this new generation be? How will it be remembered? Will it be measured in terms of bold steps taken or indifference? I choose to believe this great Nation will take the bold steps necessary to fight and win back the future for its children by combating our national debt, steps taken in spite of fears - steps taken in spite of political leaders who lack the moral and ethical fiber to do what is right for the country in lieu of what is right for them. Steps like reducing the size of federal government because governments are instituted among men, deriving their just powers from the consent of the governed, not by the politician, by the rich and for the rich. Steps like capping spending limits because it is the necessary and right thing to do to achieve prosperity for our children and their children. And last, to vote for a balanced budget amendment to ensure elected officials are once again held accountable to the people who elect them.
Now comes a time when all Americans, no matter how small or disaffected, must stand and make a difference. There is no longer safety in indifference because we believed ultimately our leaders would do "the right thing." If we look at the chart above, history going back over sixty years shows us our politicians are not capable of doing the "right thing" for this country. It is now our time, and we need a hero who, in the face of adversity and danger or from a position of weakness, will display courage and the will sacrifice for the greater good of this Nation. Who will it be? Where are you? This country is calling out in its time of need!

[Ericwvb]

This is a very clever long term strategic move for China. China is looking at a huge food deficit and has to import massive amounts of food. China and US now are in a "mutually assured economic destruction" pact with each other. China needs our food. If food prices go too high, we could just limit exports and our food prices would go down since we have enough to feed ourselves. But that's no longer possible since China has their button hovering over the destruct button since we do everything on their credit card now (since we can't expect the rich to pay anything extra!).

[bigsk8fan]

we need china's money in order to finance all the tax breaks for the ultra rich. this is not new.

[GFRANCESRF]

blah........blah...........blah.............occupy dribble

[GFRANCESRF]

blame obama

[logicalindividual]

Many people here are not thinking and blaming one political party or another. If we really want to blame anyone here, we should blame ourselves. We the American people have caused this situation to ourselves. Yes so the upper class and the rich have tax breaks. Yes we have programs to assist those not so fortunate e.g. food stamps...also we have those programs inbetween as well. However what do we not have? An active labor force that will truly earn their keep. Now don't get me wrong. I do understand there are many people that are attempt to just make ends meet...it IS a rough economy. However, there are professionals that are unemployed that still have not gotten back to work because their unemployment check pays the bills without worry. Can you all get a job or not? Possibly...but the purpose of unemployment is to keep you temporarily afloat...not permanently. So there are some I am calling out because unless there is something truly wrong...you shouldn't be in the unemployment status long. Again...blaming Obama for these trillions of debt is not his fault...yes it's his approval. However if you trace this whole process down...it's the rich/upper class that have slowly been hurting the US economically. It's understandable that people who work for their money would like to keep as much of it as possible. Nevertheless, live in your means...not luxurious like a lot of people...and you don't have to make frivolous expenditures e.g. million dollar homes.

While we are on the situation of the rich/upper class...corporations and businesses need to start hiring the professionals not this whole "pick only the best" crap. Look for the competent people that will keep your company moving...if you find that exceptional person that moves your forward leaps and bounds...so be it. However, hunting for the "right person". Again, I am not saying look for someone that isn't qualified...but this whole...we'll pick whom we want when we want is hurting the workforce as a whole. If we really wanted to nitpick regarding money...no offense corporate people but those that are getting paid six figures?....give some back... not just as a donation but back to your employees...heck..take a paycut for a little so some people doesn't get laid off. It will help morale of your company as well as letting you know...you actually care.

[bigsk8fan]

yes, this is exactly the point. the ultra rich pay almost no taxes, unlike the rest of us.

[mjlewis6]

Is the price for Taiwan high enough for Mainland China to invade and thereby cancel the debt?

Or do we hope for a transition government in Mainland China to forgive the debt when change towards democratic reforms takes place and a new unified democratic China takes hold?

[documemts]

US will go bankrupt and take down China.

[ajvw]

government estimate misses by 30%. government....nuff said

[Jhihmoac]

Yeah...and?

[Bravo2-162]

Here is the reality; every country is in debt up to their eyeballs to every other country. As long as no one rocks the boat and plays the game everything is fine. Problems arise when the US has a large economic event like we had. You could see the ripples throughout the world economies. No country's money is really tied to anything and the only reason it is worth anything is because you cannot prove that it is worthless. In China's case their economy is so dependent on the vitality of our economy it forces China to make sure that our economy is stable. If we default on our debts the world collapses. I agree that the deficit spending is out of control by our government, and eventually there will be a large enough event in the world to cause this world economy house of cards to fall. If we do not put ourselves on better financial footing the results for our way of life will be total destruction.

[notyrants]

and we do this by?

[whiskeyblue]

Unfortunately, neither party is going to get this problem fixed. If you haven't noticed already, we have a dysfuntional government. The only way the deficit is going to resolve itself is like you said, a large enough event in the world to cause the world economy to crash to wipe the slate clean. Yeah, a lot of people are going to end up hurting, but that's the only way people are going to learn.

[RenaeMe1972]

I truly believe this could have been avoided if only the gov't had presented buying our own debt to the American public as the patriotic thing to do. It could have been done like the "war bonds" drives in WWII - invest in America today to secure a better future.

Instead, investment firms marked these as nearly as bad as junk bonds, so the only investors willing to buy them up were foreign gov'ts.

*sigh* What a missed opportunity to really pull our country together.

[notyrants]

Globalism is for corporate capitalists, not the citizens of nations.