The Foreign Interests Who Have Been Buying American Bonds Are Unlikely To Drop Them Altogether

Category: Finance, Credit.

America is steadily being purchased by foreign interests. S. government has sold treasury bonds to anyone willing to buy them to fund our country s budget deficits.

For years, the U. There is mounting evidence that foreign interests are now switching some of their funds to private American securities- stocks and bonds issued by private companies. Our government is selling out, and we re selling out right along with it. These trends coincide nicely with the desertion of the act of saving on the part of Americans. Following are the top ten holders of United States Treasury bonds, as of summer 2007: Japan, with around$ 600 billion. China, with around$ 400 billion. K. , with around$ 250 billion.

Brazil, with around$ 100 billion. Oil exporting countries, which collectively held around$ 125 billion. Caribbean countries, which collectively held around$ 75 billion. Hong Kong, with around$ 55 billion. Luxembourg, with around$ 65 billion. Taiwan, with around$ 50 billion. 1Korea, with around$ 50 billion. However, one interesting trend is that the percentage increase from month- to- month has declined.

Every month of every year, our debt to other countries increases. It seems that this slack in the consumption of bonds is being accounted for by an increasing rate of foreign investment in private securities. The foreign interests who have been buying American bonds are unlikely to drop them altogether. It seems that other countries may be tiring of holding onto bonds and dipping further into our economy to reap the better returns provided by private securities. If the holders of American bonds all decided to sell, the market for the bonds would be flooded, which would raise yields and drop the price of the bonds. S. would have to pay higher interest to keep selling bonds, which would not be good for the American people, and the other countries would lose considerable investment worth as the value of the bonds declined. The U.

As alluded to earlier, one reason for the large amount of bonds that are sold to other countries is that there just aren t enough Americans who are savers or safe investors to buy the bonds. S. was in negative savings mode, as its citizens spent more than they made. In 2005 and 2006, the U. This has resulted in our dependence on foreign money to keep our country running. S. comptroller general, said that the, David Walker huge holdings of American bonds by foreign countries was a powerful weapon in the hands of countries that may be hostile to our interests. In 2007, the U.

If an enemy of America wanted to do serious damage to our economy, at its own expense as well as ours, it could sell of its bonds on the open market, dragging bond prices down. It would become more expensive for consumers and businesses to borrow money. Our government would be forced to pay higher rates on its bonds, which would spill over into the rest of our economy. With foreign interests buying up ever more of our economy, both in the form of debt issued by our government as well as securities issued by private companies, the U. Our enemies now have a tool to do us great harm, no bombs or airline hijackings required. S. has put itself in a perilous position. It is not too late to reverse this trend and become solvent again, but it starts at home.

It is up to every American to work hard, invest, save, and build a future on solid ground, not one paid for by foreign interests.