How in flap's name does every country in the world borrow money?

Raider · 25 Jun 2006 at 22:14

Was looking on that CIA website deely the other day which has general information for every country.
It became apparent that almost every country has a large amount of external debt. US owes $8.8 trillion for example.

So looking at it in a simple way, how can every country be in external debt? Who is funding this?

I'm guessing it's more complicated, involving trade deficits or something, but can anyone explain simply? Ta

Freeman · 25 Jun 2006 at 22:17

Thats some credit card limit the US have!

cheets64 · 25 Jun 2006 at 22:23

The US have the Petro Dollar which means all the money traded in oil goes thorugh the US bank, they are soo in debt

Stringy · 25 Jun 2006 at 22:31

I know that some companies that need to to create interest on money will sometimes lend it to the government as it's a pretty safe bet in terms of getting the money back.

(at least I think so anyway)

Chronos-X · 25 Jun 2006 at 22:33

The thing about being in that much debt is that its so out of control it can't really be policed - and theres no chance of a repayment in living memory.

cheets64 · 25 Jun 2006 at 22:33

http://en.wikipedia.org/wiki/Petrodollar
I hope the US falls

50/50 · 25 Jun 2006 at 22:36

cheets64 said:
http://en.wikipedia.org/wiki/Petrodollar
I hope the US falls

me too

Oliver · 25 Jun 2006 at 22:51

http://en.wikipedia.org/wiki/Fractional-reserve_banking

Pudney · 25 Jun 2006 at 22:55

Most of the UK debt is owed to the Bank of England I believe if I remember my history correctly.

mark.souness · 25 Jun 2006 at 22:58

We borrow money from America, to lend to America, You wouldn't use your own money.. would you? You might lose it.

teaboy5 · 25 Jun 2006 at 23:02

cheets64 said:
http://en.wikipedia.org/wiki/Petrodollar
I hope the US falls

You hope it falls? So you want to see this country go down the pan too?

Freeman · 25 Jun 2006 at 23:16

Why do you want to see the US fail? You do know if the US fails it would have absolutely massive repucussions to the UK.

Energize · 25 Jun 2006 at 23:32

I wonder what would happen if bill gates withdrew all his money from the banks.

Deep · 25 Jun 2006 at 23:35

Energize said:
I wonder what would happen if bill gates withdrew all his money from the banks.

the world will stop

SiriusB · 25 Jun 2006 at 23:36

Freeman said:
Why do you want to see the US fail? You do know if the US fails it would have absolutely massive repucussions to the UK.

And many other countries too I would imagine!

SiriusB

Skull · 25 Jun 2006 at 23:42

the_one_deep86 said:
the world will stop

$25,000,000,000 isn't that much money in the scheme of things. The US treasury holds 160x that amount of money, for example.

cheets64 · 25 Jun 2006 at 23:43

We are in a better postion than the yanks, small yet forceful army maybe take in some extra land from the empire and pal up with the whole world = win win

But the the day the yanks got in bed with OPEC signed there death certificate

So far, OPEC has resisted this move although some OPEC members (such as Iran and Venezuela) have been pushing for a switch to the Euro. During Iraq's Oil-for-Food Programme, Saddam Hussein did switch to the Euro and some commentators claim this switch was another factor contributing to the 2003 Invasion of Iraq.

Im a betting man and I bet the US will take Iran, I will offer lay odds of 1000.

dangerousmouse · 26 Jun 2006 at 01:17

is this not something to do with federal gold reserves, and the individual country's entire wealth???

like when another £1m goes into circulation, the price of the Uk's gold reserves lose value. so, if you have too much actual money in circulation the ountry could technically be in debt, but when the money is taken out of circulation the country then gaines weatlh again?

although i am probably so far from correct about this i am in another galaxy

Hades · 26 Jun 2006 at 01:25

dangerousmouse said:
is this not something to do with federal gold reserves, and the individual country's entire wealth???

like when another £1m goes into circulation, the price of the Uk's gold reserves lose value. so, if you have too much actual money in circulation the ountry could technically be in debt, but when the money is taken out of circulation the country then gaines weatlh again?

although i am probably so far from correct about this i am in another galaxy

I don't think there are any major economies with gold backed currencies nowadays. It's all FIAT currencies.

Zip · 26 Jun 2006 at 01:27

cheets64 said:
We are in a better postion than the yanks, small yet forceful army maybe take in some extra land from the empire and pal up with the whole world = win win

But the the day the yanks got in bed with OPEC signed there death certificate

Im a betting man and I bet the US will take Iran, I will offer lay odds of 1000.

Personaly, I hope they take iran.

And if they full your economy is ****** just like ours.

Guess what, with out a strong economy you cant pay for your army, you cant pay your men to go attack other countries, you cant service ships, service aircraft, create and buy extra weapons and ammo.
If the US did fall i would say the UK would have more chance of being invaded then taking extra land.

You sound so naive :rolleyes: