Facts.. facts and more facts...
Despite all of the talk of a balanced federal budget and even budget surpluses on the horizon, the U.S. still remains the world's biggest debtor nation. The official national debt currently stands at about $5.5 trillion. Japan, for all of its recent economic woes, is the world's largest creditor nation. In other words, the U.S. has made a practice out of spending more than it makes; Japan has lent us the difference.
One of the side effects of the world stock market turmoil of Q4 1997, has been a rush by foreign investors, Asians in particular, to the U.S. dollar. Foreigners have primarily been buying U.S. government securities, or Treasuries. The Japanese own well over $200 billion in U.S. Treasuries. The Chinese have also become a major player in the market for U.S. Treasuries. From 1994 to 1997, the Chinese increased their holdings of U.S. Treasuries from $14 billion to $40 billion, making them the 5th largest holder of Treasuries in the world. Then, with the takeover of Hong Kong late last year, the Chinese instantly became the third largest U.S. Treasury debt holder.
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