Foreign Holdings of US Securities Have Exploded

200452489-001Foreigners now hold more than $13 trillion in American securities, a record set as the U.S. seeks to assert itself as the safest port in troubled global waters.

China and Japan combined owned more than $3.4 trillion, including $2.4 trillion in debt, a number that has grown since the data set was compiled.

The total value of U.S. stocks and bonds under foreign ownership rose 6.5 percent in 2012, with stocks actually rising more on a percentage basis, according to the most recent data from the U.S. Treasury.

Foreign holdings have more than doubled since 2005 and are getting close to the $15 trillion total size of the U.S. economy

Of the $13.26 trillion total, $4.2 billion was held in stocks, a 10.6 percent increase from 2011. Long-term debt holdings grew to $8.2 trillion, a 6.2 percent annual rise.

Holdings of short-term debt actually contracted to $811 billion, falling 7.6 percent.

The totals compare to about $60 trillion in total U.S. debt and equity holdings, meaning that foreigners hold about 20 percent. The greatest percentage of any class is in marketable treasuries, which are owned 52 percent by investors outside the U.S.

The move to U.S. assets came as the American stock and bond markets delivered solid returns for the year despite a stubbornly slow economic recovery, political turmoil and headwinds from other shores.

In fact, it may have been that geopolitical turmoil, particularly involving the European sovereign debt crisis and slowing growth in China that helped buttress foreign money into the country.

Japan leads the way in American holdings with $1.83 trillion, the great majority of which was in bonds. China was second at $1.59 trillion, of which $1.18 trillion was in debt, a number that has increased to $1.22 trillion since the June 30, 2012, cutoff for the data.

Interestingly, the Cayman Islands is the third-biggest holder of securities and the largest overall of stocks, with $516 billion. That is likely due to the attractiveness of the region as a tax haven for American cash.

The gain in U.S. assets has come with the help of the Federal Reserve. The central bank has been purchasing $85 billion a month in debt, which in turn has helped provide liquidity to the equity markets.

Central banks, though, are getting increasingly more competitive, and the Fed will have plenty of competition this year from global money printers seeking to draw foreign capital.

 

Source : CNBC

 

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About thomasdinnocenzi

Thomas D'Innocenzi is a highly accomplished, results-focused senior international executive with extensive experience in global sourcing and market development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global sourcing operations worldwide. Extensive experience in international market development operations to accommodate rapid growth. Skilled in building top-performing teams, benchmarking performance, and restricting organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. As principal of Nova Advisors, LLC I’ve assembled an exemplary team that brings with them the knowledge and experience gained from starting up a Global Sourcing program with multiple Fortune 500 companies as well as the largest supplier network throughout the Asia-Pacific region. We have experience and expertise in more than a thousand medical and pharmaceutical products in manufacturing and sourcing at the best value. The right product, the right price point and the right branding fueled these successes that resulted in double-digit growth for top line sales and bottom line net margins for our customers. What sets us apart: • Our reach includes a large network of suppliers & manufacturers spanning 13 countries in Asia-Pacific region • We understand the manufacturing process and the business of the supplier and the buyer • Our company culture is based on quality assurance and our process is based on local quality control Our commitment is to be your partner offering the best products and services at the lowest cost. Contact me to discuss how we can make the global marketplace work for you. thomas@novaadvisors.com In addition, I am open to discussing opportunities in global sourcing, international marketing & sales, logistics and medical/pharma in Thailand, Vietnam, Malaysia, Philippines & Japan. Aside from my work I enjoy piano, astronomy, physics, and assisting my daughters with their studies. SPECIALTIES: Global Sourcing, Supply Chain Management, Business Development, Marketing, Logistics, Global Networking, Market Development, Healthcare Solutions, Pharmaceuticals, Medical Devices, Technology, Asia, Southeast Asia, US and Canada
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