The Foreign Countries Holding the Most U.S. Debt
In the international finance system, U.S. debt can be bought and held by virtually anyone.
In fact, if you hold a U.S. Treasury bond or a T-Bill in your portfolio right now, you are already a creditor to the United States government.
And as you can see in today’s chart from HowMuch.net, foreign countries like China and Japan can also accumulate large positions in U.S. Treasurys, making them significant players in the overall United States debt pie.
U.S. Debt: The Big Picture
The United States federal debt currently sits at $22 trillion, and it’s held by a range of domestic and foreign investors.
|Entity||Debt Holdings||Share of Total|
|U.S. Government and Federal Reserve||$8.1 trillion||36.8%|
|Foreign and international||$6.3 trillion||28.5%|
|Mutual funds||$2.06 trillion||9.4%|
|Pension funds||$0.92 trillion||4.2%|
|State and local governments||$0.69 trillion||3.1%|
|Other investors||$3.18 trillion||14.5%|
As you can see, about $8.1 trillion of debt is held by departments of the U.S. government or the Federal Reserve. This number would include securities sitting in retirement accounts of federal employees, social security trust funds, or any of the Treasurys sitting on the Fed’s balance sheet.
Next, another $7.6 trillion of debt is held by domestic investors. These are marketable securities held by banks, mutual funds, pension funds, insurance companies, and other investors.
While debt held domestically is mostly uninteresting, a bigger question mark is the $6.3 trillion of debt that is owned by foreign countries. After all, couldn’t a country like China “weaponize” its large holdings of Treasury securities as a form of retaliation in the ongoing trade war?
Foreign Owners of the Debt
Internationally, the biggest owners of debt include China and Japan, each with over $1 trillion.
|Rank||Country||U.S. Debt Holdings||Percentage of Foreign U.S. Debt Held (%)|
|#1||🇨🇳 China||$1.11 trillion||17.3%|
|#2||🇯🇵 Japan||$1.06 trillion||16.5%|
|#3||🇧🇷 Brazil||$307 billion||4.8%|
|#4||🇬🇧 United Kingdom||$301 billion||4.7%|
|#5||🇮🇪 Ireland||$270 billion||4.2%|
|#6||🇨🇭 Switzerland||$227 billion||3.5%|
|#7||🇱🇺 Luxembourg||$224 billion||3.5%|
|#8||🇰🇾 Cayman Islands||$217 billion||3.4%|
|#9||🇭🇰 Hong Kong||$206 billion||3.2%|
|#10||🇧🇪 Belgium||$180 billion||2.8%|
|#11||🇸🇦 Saudi Arabia||$177 billion||2.8%|
|#12||🇹🇼 Taiwan||$171 billion||2.7%|
Why does China hold so much of the foreign-owned U.S. debt?
China has accumulated Treasury securities over decades, as part of its strategy to keep its domestic currency from strengthening. Interestingly, the export-heavy nation has reduced its swath of Treasurys in recent months, selling off close to $200 billion of them.
Although China has $1.11 trillion of Treasurys left in reserve, the general consensus is that dumping all of them at once would destabilize the global financial system, having an equally negative effect on China as well.
That said, with foreign nations holding U.S. debt, such a risk will always exist.
While it’s not surprising to see countries like China, Japan, or Brazil on the list of top foreign debt holders, what are places like the Cayman Islands, Luxembourg, or Ireland doing on the list?
Two simple facts help to explain these anomalies.
Firstly, despite having a population of just 60,000 people, the Cayman Islands is a hedge fund capital with over 10,000 funds domiciled there. Luxembourg makes the list for similar reasons, given that it is the European-based tax shelter equivalent.
Ireland, on the other hand, is the overseas headquarters for many U.S.-based tech giants like Facebook or Alphabet. Apparently, these corporations like to hold their overseas profits in highly-liquid Treasurys, rather than paying a repatriation tax to bring the cash back to American soil.
The Big Pharma Takeover of Medical Cannabis
The Big Pharma industry is entering the cannabis space, by swapping patients for patents. But what are the impacts of such a takeover?
The Big Pharma Takeover of Medical Cannabis
As evidence of cannabis’ many benefits mounts, so does the interest from the global pharmaceutical industry, known as Big Pharma. The entrance of such behemoths will radically transform the cannabis industry—once heavily stigmatized, it is now a potentially game-changing source of growth for countless companies.
Today’s infographic comes to us from CB2 Insights, and explores how and why the notorious Big Pharma are interested in the nascent cannabis industry.
Who are “Big Pharma”?
The term refers to some of the largest pharmaceutical companies in the world, considered especially influential as a group. To give a sense of their sheer size, the market cap of the top 10 Big Pharma companies is $1.7 trillion—Johnson & Johnson being the largest, with a market capitalization of $374 billion.
So far, Big Pharma has watched the cannabis industry from the sidelines, deterred by regulatory concerns. What we are seeing now is the sleeping giant’s takeover slowly intensifying as more patents, partnerships, and sponsored clinical trials come to fruition.
Could Cannabis be Sold Over the Counter?
The cannabis plant has been used in medicine for 6,000 years. However, there is still considerable debate around the role it plays in healthcare today. There are currently almost 400 active and completed clinical trials worldwide surrounding cannabidiol (CBD), a type of cannabinoid that makes up 40% of the cannabis plant’s extract.
Cannabis relies on CBD’s therapeutic properties, and recent studies suggest it may be useful in combating a variety of health conditions, such as:
- Multiple sclerosis
- Cancer side effects
As of 2019, 33 states and the District of Columbia have legalized cannabis for medical use. Its potential for pain management has led some experts to recommend it as an alternative to addictive painkillers, with one study of 13 states showing opiate-related deaths decreasing by over 33% in the six years since medical cannabis was legalized.
As the industry evolves, data is becoming increasingly important in understanding the potential of cannabis—both as a viable medical treatment, and as a recreational product. The shift away from anecdotal evidence towards big data will inform future policies, and give rise to a new era of consumer education.
Big Pharma’s Foray into Cannabis
Further legalization of cannabis will challenge Big Pharma’s bottom line, and poach more than $4 billion from pharma sales annually. In fact, medical cannabis sales are projected to reach $5.9 billion in 2019, from an estimated 24 million patients.
Seven of Canada’s top 10 cannabis patent holders are major multinational pharmaceutical companies, a trend that is not unique to Canada.
|Company Rank||🇨🇦 Canadian Patents||Company Rank||🇺🇸 U.S. Patents|
|1. Novartis||21||1. Abbvie||59|
|2. Pfizer||14||2. Sanofie||39|
|3. GW Pharmaceuticals||13||3. Merck||35|
|4. Ericsson||13||4. Bristol-Myers Squibb||34|
|5. Merck||11||5. GW Pharmaceuticals||28|
|6. Solvay Pharmaceuticals||7||6. Pfizer||25|
|7. Kao Corporation||7||7. Hebrew University of Jerusalem||19|
|8. Ogeda SA||7||8. Roche||17|
|9. Sanofi||6||9. University of Connecticut||16|
|10. University of Connecticut||6||10. U.S. Health and Human Services||13|
It comes as no surprise that many pharmaceutical giants have already formed strong partnerships with cannabis companies, such as Novartis and Tilray, who will develop and distribute medical cannabis together in legal jurisdictions around the world.
Data is the Missing Link
While the body of knowledge about the many uses of cannabis continue to grow, clinical evidence is key for widespread adoption.
Products backed by data will be a defining criteria for major companies to come into the market en masse. And ultimately, Big Pharma’s entry could accelerate public understanding and confidence in cannabis as a viable option for a range of ailments, and mark the next major milestone for the industry.
Craft Beer Boom: The Numbers Behind the Industry’s Explosive Growth
This infographic takes a closer look at the craft beer revolution sweeping across the U.S,. and its far reaching economic impact.
All movements start with rebellion, and the craft beer revolution is no different.
Born from the frustration of mass-produced beer made from cheap ingredients, entrepreneurs went head-to-head with global brewery giants to showcase local and independent craftsmanship.
Suddenly, drinking beer became less about the alcoholic content and more about the quality and experience. Craft beer allowed for constantly changing flavors, recipes, and stories. With sales accounting for 24% of U.S. beer market worth over $114 billion, the global craft beer movement has been historic.
Which States Bring Home the Beer?
Today’s map from C+R research demonstrates the growth of the craft beer market, by ranking the U.S. states based on craft breweries per capita.
The data for this visualization comes from The Brewers Association—an American trade group of over 7,200 craft brewers, suppliers, and distributors, as well as the Alcohol and Tobacco Tax and Trade Bureau.
According to the data, Vermont has emerged as the craft beer capital of the U.S. with 11.5 breweries per 100,000 people. That’s equal to 151 pints of beer produced per drinking-age adult. Following closely behind are Montana and Maine, each with 9.6 breweries per capita.
You’ll notice that in Southern states such as Alabama, Georgia, and Mississippi, that there are only 0-0.9 breweries per capita. This is actually because of tighter liquor laws—for example, only 10 years ago, it was illegal to sell specialty beer in South Carolina that contained more alcohol content than a typical Budweiser.
Becoming a Brewery Nation
In 2008, there were only 1,574 breweries across the United States.
However, as you can see in the below data from the Brewers Association, the total amount of craft breweries, microbreweries, and brewpubs has climbed to 7,346 in just a decade.
Of the three categories of craft beer, microbreweries have contributed the most to recent production growth. Last year, they accounted for 80% of this growth, up from 60% in 2017.
The term microbrewery refers to the maximum amount of beer the brewery can produce. For microbreweries, that number is 15,000 barrels (460,000 U.S. gallons) of beer per year. They also have to sell 25% or more of their beer on site, which is why we are witnessing a surge in breweries that double up as a restaurant or bar.
Comparing this data to figures on larger breweries available from the Breweries Association, it is clear that it is the larger, more established breweries that are feeling the heat. While their growth slows, more small breweries open, and sales are further cannibalized.
The Economic Impact of the Craft Beer Market
When it comes to pure dollars, C+R Research notes that Colorado comes in at #1 with an economic impact of $764 per person. Vermont is at the #2 spot with an economic impact of $667 per person, despite having a higher concentration of breweries per capita.
How do the rest of the states compare?
The global craft beer market is expected to reach $502.9 billion by 2025—while the craft brewing industry contributed $76.2 billion to the U.S. economy in 2017, including more than 500,000 jobs.
Will Craft Remain a Growth Category?
While many argue that craft beer is approaching its peak, the data is promising. Experimentation with new processes and ingredients will continue to drive the market forward.
Craft brewers all over the world are tapping into the novelty factor by exploring weird and wonderful innovations, like deer antler-infused beer and take-home brewing kits.
While the overall beer market lagged in sales by 0.8% last year, the craft brew category grew by 3.9% using the same measure. Further, craft still only makes up 13.2% in total beer volume in the U.S., meaning there is still plenty of market share to gain.
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