Lostplanet22 said:
SamuelRSmith said:
libellule said:
SamuelRSmith said:
This is exports-imports. This doesn't rank wealth, at all. In fact, as current accounts will always, by definition, end up balancing, this implies that in the future, the USA will have one of the largest trade surplusses in the world, and China, the largest trade deficit (either that, or minimal surplus/deficit for very, very, very long periods of time).
This is, in no way, a measure of how rich or poor a country is.
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I do not get what u are saying. Wealth ? what are the wealth that US possess outside a debt ?
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I... err.. don't get what you're saying. I didn't even mention the wealth of the USA, I'm just saying this isn't a measure of wealth (which you implied it was, through your title).
But, if you want to know, the USA has more wealth than any other country in the world by just about every measure - it's the most resource-rich country in the world, its workers are the most productive (The average American is 40% more productive, each year, than the average European... and the average American produces the same amount as 11 Chinese people, or 43 Indians!), also, 90% of the world's largest corporations and brands are based in the USA. And, somewhere along the line, pretty much every major non-American corporation has a lot of American money invested in it.
Remember, the only reason the USA was able to accumulate such a debt, is because the lenders are confident that the USA are capable of paying the debt back.
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That was true for quite some time because they also believed a few years ago that USA would take measures to stop the growth of the debt but that didn't happen. That is why some countries who owe some of the USA debt have transferred some of the dollars to Euro's/and other currencies creating the weak dollar that we know now compared to Yen and Euro..
And also this
The announcement by credit rating agency Standard and Poor’s that it had downgraded its outlook on US debt to “negative” has sent a shudder through global financial markets. The decision means there is now a one in three chance that US debt itself will be downgraded over the next two years—an event without precedent.
More than the state of the US economy and government finances, however, is being called into question by the S&P decision. With US debt considered the safest in the world, any downgrading means that the role of the US dollar as the world’s reserve currency will be severely undermined, if not ended altogether.
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Yes, I'm well aware of the S&P outlook downgrading, which is why I said that the USA will be getting its debt habit dead within a few years. As for the end of the dollar world-currency... doubt it, very much so. Who's going to replace it? The Euro's dying, Yen is a complete mess, and China's currency is inflating through the roof (faster, even, than the USA).
However, this is discussing future debt. Libellule seems to be of the impression that the USA won't be able to deal with its current debt, I do not believe this to be the case. Future debt is a completely different beast, and the USA won't be able to fund deficit spending as easily, which is why the USA will start more severe cuts.
