Fed Owns 64% More U.S. Government Debt Than China

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http://www.cnsnews.com/news/article/terence-p-jeffrey/fed-owns-64-more-us-government-debt-china

(CNSNews.com) - The Federal Reserve owned 64 percent more U.S. government debt than entities in the People’s Republic of China did as of the end of November, which is the latest period for which the Treasury has reported on the foreign ownership of U.S. government debt.

The $1,316,700,000,000 in U.S. Treasury securities that entities in mainland China owned as of the end of November set a record for China, but it was still $846,966,000,000 less than the $2,163,666,000,000 in U.S. Treasury securities the Federal Reserve owned as of Nov. 27, according the Fed’s weekly balance sheets.

As of January 9, the latest day on the Fed’s last weekly accounting sheet, the Fed had increased its holdings of U.S. Treasury securities to $2,212,924,000,000.

The Fed also owns $1,490,167,000,000 in mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae.

At the end of January 2009, the month President Barack Obama was first inaugurated, mainland China owned $744.2 billion in U.S. government debt and the Fed owned $475.129 billion.

When Sen. Richard Shelby (R.-Ala.), a member of the Senate Banking Committee, took to the Senate floor last week to explain why he had voted against the confirmation of Janet Yellen as the new chairman of the Federal Reserve, he made a point of the fact that the Fed—not the People’s Republic of China—is the world’s largest owner of U.S. government debt.

“In fact, the Federal Reserve’s balance sheet shows the Federal Reserve itself is by far the largest holder of U.S. Treasury bonds,” said Shelby.