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Oil Brings Americans Closer to OPEC Debtor Dependence
Daniel Kruger
Bloomberg
July 14, 2008
Petroleum-exporting nations from Saudi Arabia to Russia are not only charging Americans record high prices for fuel, they are also poised to become the biggest creditor to the U.S. government.
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Holdings of Treasuries by oil producers and institutions such as U.K. banks that are proxies for Middle East nations rose 44 percent this year to $510.8 billion through April, four times faster than the rest of the world, according to the Treasury Department’s most recent data. At the current pace, they’ll surpass Japan, which holds $592.2 billion, as the largest owner this month.
While the investment of so-called petrodollars into government debt is helping to temper a rise in borrowing costs as the U.S. finances a record budget deficit, it highlights America’s dependence on foreign money. New York’s Chrysler Building was bought last week by Middle East investors.
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