Meltdown 101: Foreign Investments in US Debt (Christopher S. Rugaber)

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The Cayman Islands. (Photo: Don McDougall / Cayman Islands Department of Tourism)
The Cayman Islands. (Photo: Don McDougall / Cayman Islands Department of Tourism)
Aug. 17, 2009 (AP) WASHINGTON -- Many Americans know that China holds the most US Treasury debt, followed by Japan. But who would expect a group of Caribbean countries would collectively come in fifth?

Or that Luxembourg would come in eighth?

A look at which countries hold large amounts of Treasury securities -- investments in US debt -- provides an interesting glimpse into the world economy. Some governments -- like China -- have amassed large holdings in an effort to keep their currencies from becoming too valuable against the dollar, which keeps their exports to the United States cheaper.

Others have large holdings because of their financial sectors.

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