Brad Setser does a very interesting bit of detective work and concludes that much of the UK's holdings of US Treasury securities, are on behalf of China. He gives us a graph demonstrating that when the UK's official holding declines sharply (usually in June), China's suddenly rises.
Setser estimates that China owns $1.425 trillion in Treasuries and Agencies, which is equivalent to about 10% of US GDP. ("Treasuries" are debts directly owed by the US Government, "agencies" are debts of the US Government's organisations, as explained in this Federal Reserve handbook from 2004.)
He ends by calling for more transparency in British accounts of these holding - that would be most welcome all round, generally. Half our problems (and, I assume, opportunities for fatcat swindlers) stem from our not knowing the real position of the world's finances.
Nor do they want us to know!
ReplyDeleteI thought you may have been shyly asking me over at James' to come over and be obnoxious here too.
Incase you were feeling left out.
There's not a lot on this post for me to get all twisted in a knot over...do try harder.:)
Key things that drive me wild is corruption and racism.
Welcome, Ubermouth. Plenty corruption in the financial world, it seems.
ReplyDeleteWhich brings us to the point of who owns Britain.
ReplyDeleteOkay: who does?
ReplyDelete