I have read on Yahoo that the US debt is now 6 400 billions of US dollar!!
The USA need investments to equilibrate the budget... 2 billions everyday.
I just wonder where does this huge amount come from...
What would happen if the investors don't invest 6 400 billions, but 5 000 for instance? Would it be a bankrupt of the USA??
Who could explain it to me? It's a bit confusing...
I was wrong... The amount of 6 400 billions is for the debt the USA have to refund each year! The total amount of the US debt is more than 33 000 billions dollars.
So, I don't understand how a country can survive with such a huge debt! Why do the investors still put their money there? Are they sure to get their money back?
Who could tell me how all this works? Eurobillandcoins... You work in the BNP... could you tell me more?
I don't really know lot about these things but I think most of the dept is internal. The external dept of the US is only about 850 - 900 billion dollars if I remember correctly.
I'm just a branch manager of the BNP i don't analyze investment debtloads. But I do know for a fact the US debt is at 33 trillion dollars. This country survives with continuous support from places such as the World Bank and others. I'm not the Investment banker in our branch but I can counsult him when he comes back. I'm posting this from the branch when I'm free right now.
eurobillsandcoins wrote: I'm not the Investment banker in our branch but I can counsult him when he comes back. I'm posting this from the branch when I'm free right now.
K3lvin wrote:I think most of the dept is internal. The external dept of the US is only about 850 - 900 billion dollars if I remember correctly.
Well, even for "only" 900 billions dollars... I would like to know what is the mecanism for a country debt. Who gives money? Is it the World Bank, like for the Third World?
The thing I don't understand is why some private investors could invest in a country if they are not convinced to get some profits. I've read that some Asian countries like Japan invest huge amounts in the USA just to be sure of a high exchange rate for the dollar (to help their exportations).
But is this money considered as "lost", if it never ends?
Who as a link on it? I can't find any information about that...
In the first nine months of 2002, Russia invested $8.462bn in the US economy. This is 10 times as much as US investments in Russia over the reported period, which amounted to $841m.
In the first nine months of 2002, Russia invested $8.462bn in the US economy. This is 10 times as much as US investments in Russia over the reported period, which amounted to $841m.
The author is very clear. The situation is critic, actually. I don't think a war in Gulf can make the investors feel secure.
As he says:
"There is a growing disenchantment with the American investment climate," says Robert Hormats, vice-chairman of Goldman Sachs International in New York. Corporate governance scandals and the loss of control over the federal budget in Washington haven't helped reassure foreign investors, who were already reeling from the stock market's dive.
As a result, the dollar has come under pressure on foreign exchange markets.
Thomas Hueck, an economist with HypoVereinsbank in Munich, forecasts that the euro – the new common currency in most of Western Europe, will be worth $1.10 in six months and $1.20 at the end of 2003. It was valued at 97 cents on Tuesday, well up from its value a few months ago.
(...)
"This large current-account deficit is not in the country's interest to keep running for a long time," says William Cline, an economist at the Institute for International Economics in Washington. If foreigners decide they have enough invested in the US and start pulling out, "there could be a fairly abrupt and disruptive correction."
In some article it was also written: Somebody buys Dollars and spend them outside USA. Probably those Dollars won't get back to USA. So he/she also gives a loan to USA. Maybe it is so. There are a lot of Dollars outside USA.
In some article it was also written: Somebody buys Dollars and spend them outside USA. Probably those Dollars won't get back to USA. So he/she also gives a loan to USA. Maybe it is so. There are a lot of Dollars outside USA.
Yes, there are more dollars outside than inside...
I just can't imagine what would happen if these dollars would come back one day. The USA would have a huge inflation!
The "eurodollars" (that's the name for the dollars outside) are used because the truth in the American economy is still important. All is a matter of trust.
In some article it was also written: Somebody buys Dollars and spend them outside USA. Probably those Dollars won't get back to USA. So he/she also gives a loan to USA. Maybe it is so. There are a lot of Dollars outside USA.
Interesting article!
I read this:
"a repatriation of assets out of the United States and back to Japan, Europe and other foreign creditors, would affect the international payment ability of the United States in a direct way because it would imply a weakening of the US dollar and probably lead to higher interest rates. Consequently, the US economy would face a severe economic downturn. "
The thing I fear, actually, is a bad situation in the coming war, which could ruin the trust into the US economy, already fragile with the deficits, Eron, etc... The middle class in the USA is really suffering.
The consequences for Canada would be immediate... :-/
" the future role of the US dollar appears problematical. Up to now the dollar could maintain its value due to its undisputed position as the dominant international currency. This privilege, however, does not imply that the international credit capacity of the United States would be unlimited. With alternatives sought for and emerging—such as the euro or the plans of a gold-based international currency—the dollar's global role becomes increasingly vulnerable.
The consequences of a markedly diminished position of the US dollar would be dramatic and of global proportions. "
