/View.info/ Friends, against the background of the intensifying geopolitical tension, I decided to make a post on debts.
But not to the Russians, but to Russia’s strategic adversary – the USA.
“The militancy of the Americans is also conditioned by the myth of the strength of the financial system of the United States. There is no doubt that the dominance of the dollar in world payments provides a powerful lever of pressure and influence. But this dominance over time turns into something like doping”.
In the short term this gives an advantage, but in the long term it leads to habituation and problems.
The official national debt of the United States
The ability to print money uncontrollably creates a light-hearted attitude toward debt. The official amount of the debt can be seen in the graph below
US national debt in trillions doll.
The national debt is now approaching the $30 trillion mark.
If we compare it with the GDP of the country, there are countries in the world with a significantly larger amount of debt in relation to GDP.
US GDP in 2021 is $22.7 trillion. So the government debt to GDP ratio will be 131 to 100.
But it turns out that this is only the tip of the iceberg.
Because $29.8 trillion is the debt of the US Treasury’s outstanding obligations.
Amount of total US debt
Analysts from “AB Bernstein” published shocking data on the full size of the US debt. They have done a deep analysis and gathered in one place the main debt positions of the US authorities.
It turns out that the total amount of liabilities exceeds GDP 18 times.
To be honest, this amount of debt literally shocked experts and analysts.
If it was an ordinary person or company, then such amount of debt would be basically impossible to return.
But why does the US demonstrate one of the highest living standards with such debts.
Who Funds US Debts?
Strange as it may seem, but the US siphons resources from the whole world.
After all, in order to buy something for dollars, it must be sold for dollars.
The US has long lived with a negative trade balance.
That is, the whole world imports much more goods into the US than it exports.
The negative difference in the trade balance is covered by the issuance of government bonds, as well as by the inflow of financial resources.
How does the US deal with such debt?
Anyone who has taken out loans knows that the interest rate is of great importance. So the US has very low interest rates.
It can be seen that over the past year, yields have risen significantly as inflation has picked up. But still, the yield over a 5-year period is 1.5%.
I myself would gladly take a loan at 1.5%. But who will give it to me?
But the United States, thanks to the existing world financial system, borrows at such an interest rate. Therefore, they still have no problems with repayment and debt servicing.
Summary
In fact, the US exploits the entire world due to the dominance of the dollar in payments. Realizing all this, Russia systematically reduces the use of the dollar in payments and reserves.
The introduction of overly strict measures against Russia in terms of finances could adversely affect the entire global financial system. And that is what the US fears the most.
Translation: V. Sergeev
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