Who does America belong to?
Who "belongs" to America?
Frankfurt - The US bond market has long been considered a "safe haven" for the entire world. The US has the largest and most liquid bond market in the world. US government bonds (Treasuries) are rated by supervisors as a risk-free form of investment that banks can hold without additional collateral. In the financial market crisis in particular, many investors fled to the securities that were considered safe.
Since 1917, US Treasuries have been rated with the top "AAA" rating without interruption. Since the papers are considered to be relatively safe, the US has only had to pay relatively low interest rates despite the ever increasing national debt.
For many large investors, however, the US bond market can hardly be replaced due to its size and security. Investors can be sure that they will find a buyer or seller at any time. Big states like China or Japan couldn't do without the USA at all. The US has great financial needs from abroad because it has been importing more goods than it exports for many years. In the case of China and Japan, however, it is the other way round. So they mostly invest the excess money in the US.
The escalation in the dispute over raising the debt ceiling is now calling this role into question. An actual loan default is likely to send shock waves across the global economy. But
even if the US continued to service its debt, a credit rating downgrade could reduce confidence in US bonds. Even then, the USA should have its top credit rating in
Lose rating agencies.
Japan shows that a lower credit rating does not necessarily lead to higher risk premiums. Although Japan lost its top rating in 2001, the returns are still well below those of the USA. Japan's total debt is more than double its gross domestic product (GDP).
In addition, the USA does not yet have any real competition. As the world's second largest economic area, the euro area is not a real alternative for investors. This is not only true because of the
Debt crisis in the euro area. Each of the 17 countries continues to have its own government bonds. Even the larger markets such as Italy or Germany are nowhere near the US market. However, there are long-term threats to the US as well. After all, efficient capital markets are developing in China and in Europe there could still be the introduction of Eurobonds in the medium term
come. In the medium and long term, the US must get its debt problems under control in order to continue to get the money it needs from abroad. (APA)
The largest foreign holders of US Treasuries in billion US dollars (as of May 2011):
1. China: 1,160
2. Japan: 912
3. Great Britain: 347
4. OPEC countries: 230
5. Brazil: 211
6. Taiwan: 153
7. Caribbean banks: 148
8. Hong Kong: 122
9. Russia: 115
10. Switzerland: 108
11. Canada: 91
12. Luxembourg: 68
13. Germany: 61
(Source: US Treasury Department)
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