U.S. economy heading straight for the cliff

[LeGenD]

Sorry it doesn't work like that. USA has not got written in some heavenly book that they cannot fail no matter how outrageous their policy is. People used to say the same thing about previous civilizations/countries/e.t.c. that they cannot fail but then they had rug pulled under their feet.

I am not saying that US economy does not have its flaws. US have faced several economic recessions to date. However, total economic collapse is not possible unless US populace stops working. Use common sense.

Although I agree USA failing economically will have big impact on the world there is no doubt about it. And it may lead to few million or a couple of billion people dead but then world will correct itself and move one. That's how it has happened always.

This is not so easy in current times when world economic fibre is more intertwined then it has ever been. If US economically collapses, the next big casualty will be China and then a chain-reaction will follow.

US economic collapse will change our lives forever.

 

[Banglar Lathial]

you people do realize that the US is only ranked #20 on the worlds list of countries with external debt % relative to GDP right? European countries are far worse off though not alone.


list of countries in ranked order

Ireland – 1,239% of GDP

United Kingdom – 451.4% of GDP

Switzerland – 391.3% of GDP

Netherlands – 367% of GDP

Belgium – 353.7% of GDP

Denmark – 283.2% of GDP

Hong Kong – 265.7% GDP - Kind of a special case since they have a financial system seperate from China.

Sweden – 262.3% of GDP

France – 254.4% of GDP

Norway – 246.9% of GDP

Finland – 244.8% of GDP

Austria – 241.3% of GDP

Portugal – 207.3% of GDP

Germany – 183.9% of GDP

Greece – 178.9% of GDP

Spain – 169.5% of GDP

Australia – 139.9% of GDP

Italy – 136.6% of GDP

Hungary – 110.3% of GDP

United States – 99.46% of GDP


*external debt is "The portion of a country's debt that was borrowed from foreign lenders including commercial banks, governments or international financial institutions. These loans, including interest, must usually be paid in the currency in which the loan was made. In order to earn the needed currency, the borowing country may sell and export goods to the lender's country."

External Debt Definition | Investopedia


list of the biggest Holders of U.S. Government Debt

1.Federal Reserve and Intra-governmental Holdings – $6.326 trillion

2. China – $1.132 trillion

3. Other Investor/Savings Bonds – $1.107 trillion

4. Japan – $1.038 trillion

5. Pension Funds – $842.2 billion

6. Mutual Funds – $653.5 billion

7. State and Local Governments – $484.4 billion

8. United Kingdom – $429.4 billion

9. Depository Institutions – 284.5 billion

10. Insurance Companies – $250.1 billion

11. Oil Exporters – Holding $232 billion

12. Brazil – Holding $206.4 billion

13. Caribbean Banking Centers – $185.2 billion

14. Taiwan – Holding $149.6 Billion

15. Switzerland – Holding $113.9 billion


looks like China only holds about 5-6% of US debt.

What does GDP have to do with external debt? As you quoted,

*external debt is "The portion of a country's debt that was borrowed from foreign lenders including commercial banks, governments or international financial institutions. These loans, including interest, must usually be paid in the currency in which the loan was made. In order to earn the needed currency, the borowing country may sell and export goods to the lender's country."

So long as dollar, or dollar denominated assets/etc continue to be 'accepted' by your creditors, then you should face no problem. If they stop accepting dollars, then that's when things get 'interesting'. Nobody pays national debt by using their "GDP".

 

[Thomas]

What does GDP have to do with external debt? As you quoted,


So long as dollar, or dollar denominated assets/etc continue to be 'accepted' by your creditors, then you should face no problem. If they stop accepting dollars, then that's when things get 'interesting'. Nobody pays national debt by using their "GDP".

Definition- Debt to GDP Ratio

" This measure gives an idea of the ability of a country to make future payments on its debt. If a country were unable to pay its debt, it would default, which could cause a panic in the domestic and international markets. The higher the debt-to-GDP ratio, the less likely the country will pay its debt back, and the higher its risk of default."

 

[nwmalik]

they will start another war and recover their economy

 

[lem34]

Serving and staying patriotic to the land where you earn your bread and butter , which welcomed you with open arms is a concept difficult here for many to grasp. Carry on brother , you are on the right track .

On the topic , haven't we been hearing this since last 4 years now ?

Right now it is the EU economy in turmoil and not the US .

Being blinded by patriotism does not change the fact that America is going bust

 

[AbhijitSingh]

Being blinded by patriotism does not change the fact that America is going bust

Every single ratio of USA economy is better than Pakistan.. What does it say about Pakistan then.. Busted last year ??

 

[lem34]

U.S overcame even the great depression and emerged a stronger nation and a super power. The situation today is nothing when compared to 1929.

Do you not understand it is a systemic failure. Do you know what a system failure is different to a simple recession and or down turn

A number of you have come on here and stated the fact that if American economy folds other places will be hurt.

1. That does not mean that it is any less likely to go bust.

2. Those that are suffering as consequence of American injustice will benefit.

3. Those that are hungry and starving can not get more hungrier or starve more.

It's not the issue of debt but budgeting. Currently the US government is spending more than it can collect from American tax payers. If this continues soon US could be accumulating the equivalent of her entire public defense budget in debt interest alone per year.

Currently debt is at 15.7 T.
The current debt each american tax payer has to shoulder amounts to close to $138,600 USD.

That said some on here can simply not see the obvious

US political groups (Democrats and Republicans) should end their political deadlocks on economic affairs. All issues will be resolved.

Obama is serious about resolving the economic crises. However, Republicans not always agree with him.

The recent statement of Mr. Ben Bernanke is intended to grab the attention of the politicians. This is a scaremongering tactic. Strong statements from big individuals will ensure that political deadlocks are minimized.

US economy is too big and complex to fail like some members here want to believe. If it happens, the economic fibre of current times will be damaged beyond repair.

Problem is; some people cannot see between the lines.

Some would say that about you

SEE. This is one of the guys I was talking about in post #22. He JUST DOESN'T GET IT. But that's O.K. The U.S. will pull out of this little tailspin, like we ALWAYS do. And our 'friend' who wishes us ill will shall remain ....... in Pakistan. I think for him that is punishment enough.

Facing facts does not mean that anyone wishes you well or bad. What is the matter with you? Most of us will be adversely affected by America going bust and any discussion on this and taking a negative view of the future does not mean that one hares America

I am not saying that US economy does not have its flaws. US have faced several economic recessions to date. However, total economic collapse is not possible unless US populace stops working. Use common sense.


This is not so easy in current times when world economic fibre is more intertwined then it has ever been. If US economically collapses, the next big casualty will be China and then a chain-reaction will follow.

US economic collapse will change our lives forever.

That does not mean that it is less likely

Every single ratio of USA economy is better than Pakistan.. What does it say about Pakistan then.. Busted last year ??

Another Indian obsessed with Pakistan. I suggest that you start a thread about Pakistan and discuss Pakistan. Do you not understand this thread is about America?

Ten years? I could dig up an old post that show you claiming it would have happened already. I guess when your magic 8 ball fails you just push back the deadline eh? (try getting some magic slippers, clicking the heels together and wish us away)

I joined the forum on 6th June 2011. I have stated in some past posts that in my opinion sometime in the next ten years the US dollar will hit the tipping point where US dollar will not be accepted as it is today, when the US dollar loses the reserve currency status that will signify serious repercussions for America and I believe that default is a real possibility

 

[TheJewverine]

they will start another war and recover their economy

 

[A.Muqeet khan]

SEE. This is one of the guys I was talking about in post #22. He JUST DOESN'T GET IT. But that's O.K. The U.S. will pull out of this little tailspin, like we ALWAYS do. And our 'friend' who wishes us ill will shall remain ....... in Pakistan. I think for him that is punishment enough.

Kinetic enery device i hope u really do but let the time settle this and yes the USA is to big to go default in a go but time is unpredictable sometimes so like i say hope for the best prepare for the worst

 

[Sevvv]

The main problem is they import way too much and export too less, period.

 

[lem34]

This downturn is a systemic failure. The failure is due mainly down to de-regulation and failure to enforce rules. Capitalism is based on supply and demand, as well as risk and reward. If one takes the risk of cheating and gets away with it, he gets a reward, this leads to more cheating (heard about Mr Ponzi). By not properly regulating the system, cheaters got rewards. Multiply this by several million, and you get our current issues. If regulations had been implemented, this would never have happened. Instead, we might have had another mild recession and your cyclic suggestion would have resulted.

UN report on the matter:


http://www.unctad.org/en/docs/gds20091overview_en.pdf

doubt you will read all this but there you go.

In 2012 :


1) According to the US Census Bureau ,today , 1 in 2 persons in America is already living at Poverty or Near Poverty levels .

That is a whopping 50% of the American population living a life of shambles , starvation , and utter desperation .



Census shows 1 in 2 people are poor or low-income - BusinessWeek

This story no longer exists - BusinessWeek


Census data: Half of U.S. poor or low income - CBS News

http://www.cbsnews.com/8301-201_162-...or-low-income/


It is so bad in the States that , even the illegal migrants are leaving the USA en masse !

Yes, The Illegal aliens find that Mexico has a better quality of life !!! ( CNN's Jack Cafferty )

http://caffertyfile.blogs.cnn.com/20...r-better-life/


Number of illegal immigrants in U.S. declining - US news - Immigration: A Nation Divided - msnbc.com


http://www.msnbc.msn.com/id/38961638...-us-declining/

 

[Ulysses]

Hows Pakistans economy?

You should worry about her.... Not the US..

 

[Mercenary]

No it does not you have polarised society that is why you had demonstrations last year. Your country has no natural resources and would be in the Jordan bracket without the external assistance your country enjoys and when America goes bust your country will disappear

Not really.

Israel's main goal was to be self sufficient.

They use American Aid to invest in their own defense industry unlike Egypt which uses that money to buy American Weapons.

Israel is a global leader in Weapons Industry
Israel is a global leader in Agriculture and Irrigation
Israel is a global leader in Medical and Pharmaceutical Research
Israel is a global leader in Information Technology and Computer related developments
Israel is a global leader in Green Technology

 

[truthseer]

Hows Pakistans economy?

You should worry about her.... Not the US..

Our debt is less than 100% of our GDP

 

[LeGenD]

Some would say that about you

According to your superficial claims, US economy should have collapsed in the recent economic recession. Get real.

That does not mean that it is less likely

External stakeholders will force USA to reform its economic policies. Understand?

Oh wait! Reforms are already happening in USA. Of-course, things will take time.

Our debt is less than 100% of our GDP

And inflation is in double-digits. And not to forget the energy crises and its impact on our industry.