National Debt !!!

[gatesmr2]

Ok just a question someone more in the know might be able to answer for me. :?:

We hear that the world economy is bad etc etc, and every country is in trouble. Well just been reading another thread and National Debt was mentioned in the USA.
If every country is borrowing can i ask where the heck from !! If we are all in the same state with no money where is it coming from.

Sorry if its a daft question

Martin

 

[Grinding One]

They all are just printing more notes

 

[woodbloke]

They all are just printing more notes

...that happened in Germany after WW1, and then looked what happened :shock: :shock: - Rob

 

[ByronBlack]

USA borrows a large portion of its money from China. The IMF lends to various countries also.

Debt is also purchased and sold by countries too. It's a real house of cards, and we are paying for it now.

 

[Jake]

At the moment everyone wants to be in treasury bills - nice safe haven. There's nothing inherently wrong with debt, as long as you know you have to pay it back and make the appropriate allowances for that. You don't have to print paper money in order to sell t-bills, that's a seperate issue.

 

[BradNaylor]

Ok just a question someone more in the know might be able to answer for me. :?:

We hear that the world economy is bad etc etc, and every country is in trouble. Well just been reading another thread and National Debt was mentioned in the USA.
If every country is borrowing can i ask where the heck from !! If we are all in the same state with no money where is it coming from.

Sorry if its a daft question

Martin

Not such a daft question.

Another similar one is;


All the banks in the world seem to have lost a bundle of money.

So who's got it?

Discuss...

Dan

 

[Digit]

So who's got it?

The banks.

Roy.

 

[Jake]

No-one has most of it.

Some trading/investment is zero sum (for every winner there is an equal loser and vice versa), but most is not. Derivatives are, generally, but not when one side defaults.

 

[Digit]

But the amount of 'money' in circulation, locked in bank vaults etc remains the same. It is not 'lost' in the sense that it is destroyed.
When all transactions are completed the actual 'money' may well still be within the same bank building.

Roy.

 

[Jake]

That really isn't how it works, Roy. What you just said assumes that it is a zero-sum game - and that all transactions complete. Both of those are false - the latter being a big problem with the likes of Lehman going into adminstration/bankruptcy!

Wealth can be destroyed without burning banknotes.

 

[Digit]

Dan didn't mention wealth Jake, he said 'money'.

Roy.

 

[Jake]

Oh, I missed any news about banks mislaying cash lately. But I see he mentioned 'bundles' so you must be right.