The U.S. Economy is Sick, And the Whole World Pays for its Medication

Taking advantage of the current dollar and the fact that America has been the superpower for a long time, many countries have been paying great attention to the U.S. national debt, and America’s secondary market has been the market with the deepest extent, the widest range, and the greatest liquidity in the world.

As the financial crisis becomes worse and worse, many funds are looking for help from the U.S. national debt, which also hit the historic lowest rate of return. At the same time, the U.S. dollar’s weakness may also lead those foreign holders of U.S. national debt to suffer from financial losses, which could be inevitable.

So how do we comprehend the dollar’s assets (including the U.S. national debt) for those foreign holders now? Besides the U.S. national debt, are there any other choices?

There are two experts invited to this round-table meeting to help you to understand it.

The U.S. national debt broke through the maximum which America’s GDP could bear

Guangzhou Daily: In what way will America handle its 11.3 trillion national debt?

Jiang Yong: The U.S. total debt has become too much and has broken the maximum amount that America’s GDP could bear.

It is reported that the upper limit of the National Debt Clock in New York is 10 trillion dollars, but the U.S.’s national debt has actually surpassed that, and the Clock has run out of digits. The Clock owners say two more zeros will be added, allowing the clock to record a quadrillion dollars of debt. Obviously, America will keep on raising “new” debt to cover “old” debt, and America is not hoping to repay this high debt, but worrying that no one will buy U.S. debt any more. Since the debt is growing more and more, the American government only wants to “clear it” by depreciation of dollar.

Yan Haibo: From the U.S. bailout plan we can see that their main policy is to increase the amount of money issued, and as a result the national debt will keep growing. It shows that America is satisfied with being a high-debt country, and will keep on like this, will keep on going like this, based on the fact that the American financial system has been run better than those of other countries since World War II. It’s not good for other countries objectively, but other countries couldn’t handle the problem either, and as a result, the U.S. economy is “sick,” and the whole world pays for its medication.