Top Foreign Holders of U.S. Debt

Why Foreign Nations Hold U.S. Treasuries

The United States dollar became the world’s reserve currency in 1944 towards the end of World War II. Because the U.S. dollar is the world’s reserve currency, demand for dollars remains strong as countries hold dollars in reserve to buy oil, settle international trades and to hold as their nations’ savings. These dollar reserves are held in the form of U.S. Treasury bonds (T Bonds).

The United States is able to incur massive deficits funded in part by foreign purchases of U.S. debt and more recently and increasingly through the Federal Reserve’s (the Fed) purchases of T Bonds as part of their multi-year/multi trillion dollar quantitative easing (QE) program whereby they print dollars out of thin air to buy them.

As a result of QE more than a few nations, notably Iran, Russia, China and Brazil have become increasingly concerned that the value of their T Bond holdings are being diluted by the Fed’s massive money printing campaign and have made efforts to reduce their need to hold dollars for settling their trade accounts.

Source Article from http://www.freedomsphoenix.com/News/171429-2015-02-23-top-foreign-holders-of-u-s-debt.htm?EdNo=001&From=RSS

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Top Foreign Holders of U.S. Debt