Author Topic: USA foreign debt: $ 12.000.000.000.000 (12 million times a million $)  (Read 17431 times)

Skeletor

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USA foreign debt is raising a lot more than in the past.. just think about the fact that ten years ago it were 5 trillions and now it's about 12 trillion dollars.

What in your opinion could happen if America at some point can't pay off anymore its foreign debt?

Currently we see USA doing a lot of favours toward China (biggest creditor, almost 25%); import/export agreement, pollution conferences, etc.
But what will happen in 2014 when the estimated debt will be 18 trillion dollars.. and so on?


Some links:
http://en.wikipedia.org/wiki/United_States_public_debt
http://www.brillig.com/debt_clock/
http://www.usdebtclock.org/
Last but not least: http://www.youtube.com/v/h7gCd-C-Tys&color1=0xb1b1b1&color2=0xcfcfcf&hl=en_US&feature=player_embedded&fs=1 :-)
« Last Edit: April 20, 2010, 10:36:48 PM by Skeletor »
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getter77

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Re: USA foreign debt: $ 12.000.000.000.000 (12 million times a million $)
« Reply #1 on: April 20, 2010, 10:55:49 PM »
Value of Dollar will do down moreso, economy implode moreso, rash foreign and domestic policies enacted to try to either shift blame or gloss over things----generally speaking bad time ahead.
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Skeletor

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Re: USA foreign debt: $ 12.000.000.000.000 (12 million times a million $)
« Reply #2 on: April 21, 2010, 07:42:57 AM »
I agree Brian, this could happen. If foreigners lose confidence in US$ and dump it for gold (or even Euros) a stampede effect may trigger sell offs in US stocks and bonds.. resulting in more fear of the debt to be inflated away and so on in a downward spiral.
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Skeletor

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Re: USA foreign debt: $ 12.000.000.000.000 (12 million times a million $)
« Reply #3 on: April 21, 2010, 07:51:59 AM »
I have the feeling that what USA is actually doing is monetizing (and possibly overselling) the trust that foreigners (and americans, too) have in the US$.. this trust has been created by years of success and movies and books that via the global influence of american culture created the illusion of a country that can't fail.
It's all about psychology.. but this trust can't last forever.

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mariodonick

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Re: USA foreign debt: $ 12.000.000.000.000 (12 million times a million $)
« Reply #4 on: April 21, 2010, 08:59:25 AM »
Quote
It's all about psychology.. but this trust can't last forever.

In fact there are a _lot_ of people here in Europe who don't like US politics at all, and who are happy that the power of USA seems to decrease.

There are also people who aren't that happy over the fact that their own culture and language in their own countries seems to be displaced by US culture.

Quote
If foreigners lose confidence in US$ and dump it for gold (or even Euros)

I like Euros. ;-)

 I also like the exchange rate, because I can buy games, books etc. cheaper from US shops than here (of course, sometimes taxes are added, but still ... GOG.com and similar shops are good examples.)

But I think it is wrong to try to protect and prefer one country over the others. We need a way for common / global success, but don't ask me how.
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Etinarg

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Re: USA foreign debt: $ 12.000.000.000.000 (12 million times a million $)
« Reply #5 on: April 21, 2010, 12:01:59 PM »
Currently we see USA doing a lot of favours toward China (biggest creditor, almost 25%); import/export agreement, pollution conferences, etc.

Favors towards China? The Chinese think different, it seems:
http://news.xinhuanet.com/english2010/china/2010-01/30/c_13157364.htm
« Last Edit: April 21, 2010, 12:03:31 PM by Hajo »

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Re: USA foreign debt: $ 12.000.000.000.000 (12 million times a million $)
« Reply #6 on: April 21, 2010, 12:18:02 PM »
(how to delete a message, didn't mean to double post)

getter77

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Re: USA foreign debt: $ 12.000.000.000.000 (12 million times a million $)
« Reply #7 on: April 21, 2010, 12:21:00 PM »
The Petrodollar, as it were, has been one of the driving forces that got us to this point the past several decades.  Given the energy concerns, and the USA's abhorrent failure in making use of people to solve these issues, that will also come to a head.

I'm not a fan of globalization either, my preference being each country building themselves up to be robust/stable in their own right and land while trade being friendly of their excesses when possible---not this crazy notion of "Hey, let's send all jobs in this sector to X like everybody else, nevermind if that gives us less options in the future for a growing population.  Sweet, delicious short term profit..."
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Skeletor

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Re: USA foreign debt: $ 12.000.000.000.000 (12 million times a million $)
« Reply #8 on: April 21, 2010, 12:38:57 PM »
Currently we see USA doing a lot of favours toward China (biggest creditor, almost 25%); import/export agreement, pollution conferences, etc.

Favors towards China? The Chinese think different, it seems:
http://news.xinhuanet.com/english2010/china/2010-01/30/c_13157364.htm


This is an isolated episode. It's plenty of more important things that are heavily influenced by the debt the USA owe to China (currently about 3 trillion dollars); two examples of this are the positive attitude Obama shows toward China (in his visits he never said anything about human rights violation, free speech, etc.. and let's not talk about the last pollution conference), and the fact that the USA still doesn't attack Iran (China #1 importer).
Obviously this doesn't mean that America has becomed China property.. America is just showing the good side of the medal, but at the same time is selling arms to Taiwan and constantly doing mediatic damage to China and its way of life.
Well, those are just my opinions.. global politics are something always changing and determined by many, many factors.
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mariodonick

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Re: USA foreign debt: $ 12.000.000.000.000 (12 million times a million $)
« Reply #9 on: April 21, 2010, 01:05:53 PM »
Quote
and the fact that the USA still doesn't attack Iran

... and I hope that the USA will continue to avoid attacking Iran. Partly because I think this would create World War III, and partly because I have egoistic reasons, 'cause my university is just starting a cooperation with an university at Iran, and I am supposed to work in that project. In the case of war, I doubt I'll have that job any longer.  :P  ;)
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Krice

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Re: USA foreign debt: $ 12.000.000.000.000 (12 million times a million $)
« Reply #10 on: April 21, 2010, 02:07:40 PM »
Many countries are taking foreign debt to keep the way of living. In US it's just bigger, but I wonder how long this situation can last. If this continues western countries are going to be really poor in 20 years.

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Re: USA foreign debt: $ 12.000.000.000.000 (12 million times a million $)
« Reply #11 on: April 21, 2010, 03:07:36 PM »
People think debt is hopeless 'cause they think we need to pay it all off. It's okay though, we only need to maintain a healthy debt-to-GDP ratio, though I'm guessing it's like less than half of what we have now.

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Re: USA foreign debt: $ 12.000.000.000.000 (12 million times a million $)
« Reply #12 on: April 21, 2010, 05:01:17 PM »
Why do you you worry? Didn't you know that Jesus said that worrying it's not gonna change anything. It's better to do as he said, not to worry about tomorrow, since each day is gonna take care of itself and God is gonna provide for you for your soul and body. Like for instance I live in one of the poorest countries of Europe, I didn't know if I'd get a job, but thanks to God that he pointed to me the things above and have faith in him. So I did get one, even if I didn't finish university, and I'm paid more that I could think of. God's gonna do the same for you all. Thanks to him for that and for freeing me from unnecessary worries.
« Last Edit: April 22, 2010, 06:11:32 AM by ____ »

Ex

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Re: USA foreign debt: $ 12.000.000.000.000 (12 million times a million $)
« Reply #13 on: April 21, 2010, 06:09:34 PM »
US debt is only that high when you go out five or ten years. Currently, we only owe about 1 trillian. But, we can reasonably go far, far beyond 13 trillian. After all, during WW2 our debt was 50%+ what our GDP was, where as 12 trillian dollars is less than 10% of our GDP today. So, we could safely go to at least 50 trillian, as we've leveraged that percentage of our GDP before with no adverse side effects. This whole thing about US debt is just a republican political tactic.

Skeletor

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Re: USA foreign debt: $ 12.000.000.000.000 (12 million times a million $)
« Reply #14 on: April 22, 2010, 07:43:01 AM »
12 trillian dollars is less than 10% of our GDP today.

In the Wikipedia page I posted before I read: "At the end of first quarter of 2010, the gross debt was 87.3% of GDP
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