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8
Luxembourg

Tiny, picturesque Luxembourg is also a big buyer of U.S. debt, but custodial bias probably distorts this ranking.

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Creditor Name: Luxembourg

Amount of U.S. Debt Owned (January 2013): $144.7 billion

Percent of U.S. Public Debt (January 2013): 1.3 percent

Luxembourg is smaller than Rhode Island, and it owns the equivalent of $281,046 of U.S. public debt per person. A nation of bankers, itsy-bitsy Luxembourg has the third-highest GDP per capita in the world at $80,700 in 2012, and it has no reservations about investing in other nation's cheap debt [source: CIA World Factbook]. Luxembourg's own economic stability is up for debate. While it owns $144.7 billion in U.S. debt, Luxembourg owes more than $2.15 trillion to its own foreign creditors. That ranks tiny Luxembourg at No. 11 on the global list of total foreign indebtedness [source: CIA World Factbook].

Like its neighbor Belgium, Luxembourg is a tax haven for wealthy foreign investors. For example, Apple has set up a "conduit" company in Luxembourg through which it funnels iTunes earnings to avoid higher U.S. taxes [source: Morgenthau]. Also like Belgium, investors from around the world buy U.S. debt through accounts based in Luxembourg. Since the U.S. Treasury doesn't distinguish between debt bought by bona fide Luxembourgians and debt bought by foreigners, Luxembourg's debt ownership figures may be artificially inflated.

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