American debt has long been considered “risk free.”
But with the deficit blowing out, and sovereign nations around the world crumbling, more and more are wondering just how safe our debt actually is.
Hopefully, any real crisis is a long way off, or will never happen.
But, just in case, we’ve put together a guide of who holds US debt, and what might trigger them to hit the SELL button
Nightmare Scenario: Two words: Cold war 2.0. Should Russia and China team up, the U.S. is in trouble. In fact, Hank Paulson has even said that Russia encouraged China to dump GSE assets during the crisis.
Nightmare Scenario: Amid rising geopolitcal tension, these countries use bond and debt sales as a weapon.
(List includes Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates, Algeria, Gabon, Libya, and Nigeria)
Nightmare Scenario: Japan's economy collapses and it liquidates its holdings to help the situation. U.S. debt becomes illiquid and virtually worthless as everyone rushes to sell it off.
Nightmare Scenario: The Fed actually decides to get 'independent' and refuses to go along with reckless spending.
*Note: Intragovernmental holdings including government liabilities such as social security, and so this number technically is different from the others.
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