Foreign Holders of US Debt: Changes Over the Past Year

I don’t take serious articles that talk about the dumping of US bonds by foreign governments. There is a doomsday article at least once a week talking about this. The data does not show this to be the case. Not even a little. From May 2017 we see the top holders shown in the graph below.

From May 2018 we see the top holders shown in the graph below.

The total increase from last year by all foreign holders is 55.5 billion. China and Japan are still majority holders by a long shot. At this point, the most we could say is foreigners have stopped buying US government debt. During the first sign of a global crunch foreigners will rush back into the US government debt market. The US government debt market is a disaster, but foreigners perceive it as a safe place to be. The psychology of the market participants will change one day. Someone will become filthy rich shorting the US government bond market. I don’t believe the time has come just yet.