Just read an interesting article on Moneyweb.
The world today - Is a global economic crash possible?
I read a couple of the lines a few times. This one in particular stood out:
American federal debt stands at $9trn (it was $16bn in 1929) it is no longer self sufficient in energy and imports over 60% of its needs. It has a monstrous trade deficit and needs to borrow over $2,5bn a day from foreign sources to balance it’s books. The good ship Titanic is showing signs of strain.
$2.5 Billion a day!
$9 Trillion Deficit!
So China is lending funds to America so that Americans can afford to buy Chinese products. This keeps employment and GDP high in China, and keeps America happy. But what happens when America can’t repay the loans from China (and the other countries)?
Sounds like a vicious circle to me!
2 responses so far ↓
1 Tyler // Jun 15, 2007 at 12:25 pm
Americans are living a false dollar.. :/
2 Chris M // Jun 18, 2007 at 12:27 pm
It does not surprise me at all!
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