China Rating Agency Downgrades US Debt

[privateinvestor]

But the question now is will China continue to buy our Treasury Notes/Bonds or will they begin to sell them??

[Savoir Faire-Demogague in NJ]

Who gives a rats butt. The Social Security Administration is the largest holder of US debt and will continue to be for decades to come.

[privateinvestor]

Aug 3, 2011 10:16:55 GMT -5 Savoir Faire-Demogague in NJ said:

Who gives a rats butt. The Social Security Administration is the largest holder of US debt and will continue to be for decades to come.

Apparently the Chinese give a rat's butt SF in case you missed it they own our debt which they just downgraded ...now will other countries do the same thing??

[Small Biz Owner]

Who gives a rats butt. The Social Security Administration is the largest holder of US debt and will continue to be for decades to come.

Link or source to that information?

[floridayankee]

I'll venture to guess that the media finds this as shocking as an increase in the unemployment rate.

Really, if you can't see what's coming, you're not paying attention.

[Politically_Incorrect12]

Are you really surprised by this....China has been attempting to get countries to lose faith in the US dollar for some time. Russia speaks badly about the US, now China....no real surprise.

[Small Biz Owner]

As of January 2011, foreigners owned $4.45 trillion of U.S. debt, or approximately 47% of the debt held by the public of $9.49 trillion and 32% of the total debt of $14.1 trillion.[38] The largest holders were the central banks of China, Japan, the United Kingdom and Brazil.[40] The share held by foreign governments has grown over time, rising from 25% of the public debt in 2007[41] and 13% in 1988.[42]

As of May 2011 the largest single holder of U.S. government debt was China, with 26 percent of all foreign-held U.S. Treasury securities.[43] China's holdings of government debt, as a percentage of all foreign-held government debt, have decreased a bit over the last year, but are up significantly since 2000 (when China held just 6 percent of all foreign-held U.S. Treasury securities).[44]

[Savoir Faire-Demogague in NJ]

Link or source to that information?


The SSA holds roughly $5+ Trillion in Treasuries.

[Driftr]

According to table FD-1 in the Federal Debt report ( one of the reports in the link below) it looks like as of March 4.6 of the 14.3 total debt was held by the Govt and looking at table FD-3 it appears that 2.4 of that 4.6 is held by SSA. I may be reading these wrong though. It looks like foreign & international holdings total 4.5. If China owned 26% of those, they'd own 1.2. Or about half of what SSA is holding. Assuming I got the right tables.

www.fms.treas.gov/bulletin/index.html

[Deleted]

Apparently the Chinese give a rat's butt SF in case you missed it they own our debt which they just downgraded ...now will other countries do the same thing??

They shouldn't hold much of it unless they bought more because they dumped it on the credit markets about 6 months ago (remember?). They did just exactly what I said that they would do & now they followed up with the 2nd punch.

I don't blame them. If I had an enemy I would have loved to do the exact same thing to them. We gave them the opportunity to do this to us & they did. I just thank God that our present government wasn't in charge during WWII. They would have been selling our debt to the Japanese.

[djAdvocate]

Aug 3, 2011 10:11:46 GMT -5 @privateinvestor said:

But the question now is will China continue to buy our Treasury Notes/Bonds or will they begin to sell them??

actually, that is not the question at all. the real question is that if they sell them, where will they put the money? under a really huge mattress?

[Savoir Faire-Demogague in NJ]

I have to say that I was quoting a post that one of our friends here made last week concerning who is holding the outstanding debt. The SSA was shown as the largest holder.

The poster, if I recall provided a link. I forget who the poster was.

[Savoir Faire-Demogague in NJ]

Okay, I located the post I was referring. I was incorrect with my $5+ trillion, it is $2.67 trillion. I am not vouching for this post that was made but here it is....

notmsnmoney.proboards.com/index.cgi?board=politics&action=display&thread=11732

July 21st, 2011
04:30 PM ET
Who owns America? Hint: It's not China

Editor's Note: The following piece comes from Global Post, which provides excellent coverage of world news - important, moving and odd.

By Tom Mucha, Global Post

Truth is elusive. But it's a good thing we have math.

Our friends at Business Insider know this, and put those two principles to work today in this excellent and highly informative little slideshow, made even more timely by the ongoing talks in Washington, D.C. aimed at staving off a U.S. debt default.

Here's the big idea:
Many people — politicians and pundits alike — prattle on that China and, to a lesser extent Japan, own most of America's $14.3 trillion in government debt.

But there's one little problem with that conventional wisdom: it's just not true. While the Chinese, Japanese and plenty of other foreigners own substantial amounts, it's really Americans who hold most of America's debt.

Here's a quick and fascinating breakdown by total amount held and percentage of total U.S. debt, according to Business Insider:



•Hong Kong: $121.9 billion (0.9 percent)
•Caribbean banking centers: $148.3 (1 percent)
•Taiwan: $153.4 billion (1.1 percent)
•Brazil: $211.4 billion (1.5 percent)
•Oil exporting countries: $229.8 billion (1.6 percent)
•Mutual funds: $300.5 billion (2 percent)
•Commercial banks: $301.8 billion (2.1 percent)
•State, local and federal retirement funds: $320.9 billion (2.2 percent)
•Money market mutual funds: $337.7 billion (2.4 percent)
•United Kingdom: $346.5 billion (2.4 percent)
•Private pension funds: $504.7 billion (3.5 percent)
•State and local governments: $506.1 billion (3.5 percent)
•Japan: $912.4 billion (6.4 percent)
•U.S. households: $959.4 billion (6.6 percent)
•China: $1.16 trillion (8 percent)
•The U.S. Treasury: $1.63 trillion (11.3 percent)
•Social Security trust fund: $2.67 trillion (19 percent)

So America owes foreigners about $4.5 trillion in debt. But America owes America $9.8 trillion

[Driftr]

FWIW, if anyone cares, China isn't in 2nd place. The Fed now appears to hold that honor with about 1.6T.

It should be interesting to see what happens to those SSN holdings if UE stays as high as it is and we keep the FICA tax-break in place for any length of time.

[BeenThere...DoneThat...]

>>> Talk about a recession, it will be an honest to God depression. <<<

...I think I read somewhere that if you remove govt. spending from our GDP, we're already in a depression...

[safeharbor37]

Referring to the disconnect between economic news and the markets. The real question is what is the relation of news events and the market ~ it seems that there are factors not mentioned on MSN Money that influences the markets and I'd really like to know what they are.
The rating agencies are either downgrading US securities or preparing to downgrade. All the economic figures are negative and yet the markets seem to go their own way as if none of this is happening. I still think that it may be a lack of alternatives since not only is there little but gold to go to, but the world markets aren't any more secure.
On the News Hour tonight there were two historians [Harvard & Yale] who were speculating on the polarity of politics in Washington and had concluded that the situation is similar to 1820's and the founding of the Democratic Party, 1840 preceding the Civil War and the 1920's leading to the Great Depression. So, perhaps there is something dramatic in the near future?
What some people don't seem to grasp is that all that money the government spends has to come from somewhere; either the private sector or the printing presses. It's as if the current economic problems are a result of Obama not writing big enough checks.

[pappyjohn99]

* Right now 4000 FAA workers are out and that has effected 70000 construction workers nationwide at airports and the airport funding tax revenues are losing millions a day *

The house sent a bill over to the senate to take care of this issue but the senate did not approve so they tabled the bill. ( Sound familiar?)

[Driftr]

Aug 3, 2011 17:03:12 GMT -5 BeenThere...DoneThat... said:

>>> Talk about a recession, it will be an honest to God depression. <<<

...I think I read somewhere that if you remove govt. spending from our GDP, we're already in a depression...

If there was no Federal spending (1,237), then GDP (15,004)would contract by @8%. I think what you're trying to say though is that if there was no deficit spending we would be in a depression. I think you'd have to identify how much of the state spending in the chart below is supplied by Federal in order to make that determination.
www.bea.gov/iTable/iTable.cfm?ReqID=9&step=1

[Driftr]

Aug 4, 2011 4:45:05 GMT -5 @toughtimes said:

China is certainly not trying to make people lose faith in our treasuries. That would be suicidal, at least until the Chinese have completed the process of divesting the ones they own now, and believe me they are divesting and buying hard goods like gold and other commodities. No, they are not my favorites, but they are doing what any creditor would do. They are concerned for the safety of their investments and want action to protect them.

The link below does not support the contention that the Chinese are divesting themselves of US Treasury debt. Are you getting that divestiture idea from another source that you could link for us to review?
www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt

[floridayankee]

Aug 3, 2011 21:37:31 GMT -5 @patstab said:

So keep the cutting going then see the result, its pretty simple to figure out.

Shall we keep spending borrowed money until we end up like Greece? Will that make the left happy?

[handyman2]

The Chineese are divesting slowly the bonds they are holding of ours and some other countries. If they unloaded them in a rush it would be counter productive for them.
China is changing their market focus on expanding their internal market which makes sense. They have millions of potentual customers in house. But what they must do first is create a higher standard of income in their own country so that market can afford to buy goods.

[floridayankee]

Aug 4, 2011 2:02:21 GMT -5 pappyjohn99 said:

* Right now 4000 FAA workers are out and that has effected 70000 construction workers nationwide at airports and the airport funding tax revenues are losing millions a day *

The house sent a bill over to the senate to take care of this issue but the senate did not approve so they tabled the bill. ( Sound familiar?)

No, but I can help.....It's ALL BUSH'S FAULT!!

Ok, now it sounds familiar.

[Driftr]

Aug 4, 2011 8:43:49 GMT -5 handyman2 said:

The Chineese are divesting slowly the bonds they are holding of ours and some other countries.

They were slowly divesting from 10/10 through 03/11. Since then they have been acquiring more Treasuries. Check out the link.

www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt

[rockon]

The fact that such a large portion of the SS trust fund has been invested in treasury bonds at a time when they could be down graded and China is trying to sell them should really make everyone nervous about the stability of that program. The people who were so worried about some of this money being invested in American business through the stock market should consider how safe the trust fund is in the politicians hands. SS should never be part of our general fund or budget. It is a separate and stand alone item that is funded solely by money with held from employers and workers checks for the sole purpose of providing for their benefit when they retire. We should start the restructuring of this program by removing it from the politicians greedy fingers, determine the beneficiaries/ projected costs and then adjusting the rates accordingly. Case closed and problem solved! The real problem with China is not that they own our debt but that we have free trade with a communist country that does not play on a level playing field. The only way to fix this problem is by addressing our free trade agreement issues with them.

[Value Buy]

Maybe the Chinese will switch to some safe Greek, or Italian bonds, rather then our bonds..........
Does anyone really think that will happen?
Of course, the Chinese might be interested in buying out one of those countries outright, so they can get some good Mediteranean beachfront property for their leaders......

[Driftr]

You realize the first three links were from Feb/Mar 2010? 4th was about how they're buying a lot of gold. 5th I couldn't get to because I'm not 'registered'. In your post you said they are divesting. I agree that from 10/10-03/11 they were divesting. The data shows that they are now back to acquiring. Do you dispute that data?

Edit to change not to now. What a difference a letter makes...

[handyman2]

Drifter: there was an article in the wall street journal about a month ago that quoted a Chineese official that said they were in the process of re-evaluating and reducing their their foreign debt holdings and in the process of looking at more stable markets to put their investments and were planning to expand their markets in China. What that all means is yet to be determined I suppose.

[jkapp]

Aug 3, 2011 16:13:31 GMT -5 @patstab said:

Let's put it this way, tea partiers won't have to worry about spending. There won't be money to spend, what they will be looking for is increased taxes so we can at least keep the government functioning. End of that problem.

I believe I read we can supply 60% of the money so its 40% that will either cost a lot more or will be nonexistent.

Talk about a recession, it will be an honest to God depression.

Government has plenty of money to function...what it doesn't have is plenty of money to cover its "promises." I attached a link to another post a while back that shows what makes up our spending and deficits and it borke out as follows:

The biggest expense right now is almost $1T for defense.
The next biggest is healthcare spending at nearly $900B.
The next after that is pensions at over $700B.
The next is welfare spending at about $450B.

The basic functioning of government accounts for about $150-200B. And that is easily affordable...its all the other bullshit that government never should have gotten involved in that's adding to the debt.

[jkapp]

Aug 3, 2011 21:37:31 GMT -5 @patstab said:

What gets me is boehner and them saying oh their is plenty of money to pay our bills if the bill doesn't pass. Well if there was why are they worrying about spending then?

Maybe the same way the Dems kept arguing that there was enough funds in SS to keep it solvent through 2037...yet if the debt ceiling wasn't raised, SS recipients wouldn't be getting a check.

[BeenThere...DoneThat...]

Aug 4, 2011 12:26:45 GMT -5 jkapp said:

Aug 3, 2011 16:13:31 GMT -5 @patstab said:

Let's put it this way, tea partiers won't have to worry about spending. There won't be money to spend, what they will be looking for is increased taxes so we can at least keep the government functioning. End of that problem.

I believe I read we can supply 60% of the money so its 40% that will either cost a lot more or will be nonexistent.

Talk about a recession, it will be an honest to God depression.

Government has plenty of money to function...what it doesn't have is plenty of money to cover its "promises." I attached a link to another post a while back that shows what makes up our spending and deficits and it borke out as follows:

The biggest expense right now is almost $1T for defense.
The next biggest is healthcare spending at nearly $900B.
The next after that is pensions at over $700B.
The next is welfare spending at about $450B.

The basic functioning of government accounts for about $150-200B. And that is easily affordable...its all the other bullshit that government never should have gotten involved in that's adding to the debt.

...while I'm not disagreeing with you, per se, I'd not describe defense spending quite like that...

...now you guys can start reminding me about how a by any other name, and all that jazz...