What Countries Owe the United States Money?

Rushcourt71

'China owes the United States $1.3 trillion, which is the most debt out of all the countries that are its debtors. Japan was the primary debt holder until 2008, but now comes in second place, with $1.2 trillion. Other countries with outstanding U.S. debt include Russia, India and South Korea.

European debt holders include Belgium, Switzerland, the United Kingdom, Luxembourg, Ireland, Germany, France and Italy. U.S. debt-holding nations around the world also include North American and South American countries and other nations: Canada, Mexico, Brazil, Peru, South Africa, Israel, Turkey and Chile. The total dollar value of all the countries' debt was $6.1 trillion.'

(Source: https://www.reference.com/busine ... ey-c8a9d17fb4fdea74)

KH_Hirsch

Actually the title has to read: which countries do the United States owe money. China used to be the biggest debt holder of the US until recently and was passed by Japan. Not sure if that is still the case but in a net position, the US owes, the others hold debt (I would assume t-bills mostly).

dilwale

China has reduced its holdings of U.S. debt since November 2013, when it held $1.3 trillion. It wants to allow its currency, the yuan, to rise. To do that, China had to loosen its peg to the dollar. That made the yuan more attractive to forex traders in global markets.

Rushcourt71

There are also major differences in

How much the US borrows from debtor nations

How long it has to return the same amount

How much it can continue to get without worrying about its current deficit

The weight of strict conditionalities attached to each debt

The extent of the interest involved

All of the above have certain variables compared to how much it gives out in loan packages.

In addition to specific nations, the US is also in debt to MNCs (Multi National Corporations), but the US Dollar being a reserve currency gives the nation a distinct and unfair advantage as well.  

abhidebb

US  is in debt to so many countries; however it's currency is surely having an unfair edge - Dollar is a reserve currency which has higher value. This needs to be addressed.

Great eye-opening news.

KH_Hirsch

I would argue differently. Since a lot of international trade is invoiced in USD it is in high demand and that creates the value. But to a big extent this is also based on the ability to transfer and convert USD in other currencies plus being relative stable over periods of time. Something which isn't obvious with a lot of other currencies.

Rushcourt71

KH_Hirsch 23-10-2019 03:07 PM
I would argue differently. Since a lot of international trade is invoiced in USD it is in high deman ...

I agree with you in part. No other currency has the ability to be used in the same way that the US Dollar is worldwide. You cannot for example get the Indian Rupee to be employed globally in a similar manner or with the same value.

In another context, remember also it was Richard Nixon who made the temporary shift from gold to paper currency in 1971 and it is still in place. No other country has the international ability to do so.

KH_Hirsch

I wouldn't call it a "temporary" shift from gold to paper and more so since at that point in time the US would have long lost the ability to convert USD into gold based on existing reserves. What I think is more interesting is that losing the status of the anchor or reserve currency didn't hurt the domination of the USD as expected.

Giving up Bretton Woods was meant to enable all countries to adjust currencies in line with economic development and thus the ability to produce goods which were competitive in the world market. A system of rigid exchange rates would not allow that. Unfortunately the whole concept only works really well if you have a free market with no or only minimal interferences.

With that in mind the removal of the gold standard (which in reality didn't exist anymore anyhow) and the abolishment of fixed exchange rates between other countries led to increased wellfare and economic wealth. Whether it's the USD or another currency in the future that will also heavily depend on the gross national product of such nation which ultimately is the replacement of the guarantee originally given in gold.

Rushcourt71

You have some valid points.

Bretton Woods as you mentioned was meant to assist European economies while its eventual replacement the World Bank and its sister oppressors, have a different function, and do more to damage Developing World Nations than aid them. As such they will never be key players under the present arrangement until interest based loans are replaced by loans alone and can be repaid over longer periods; something the US enjoys and exploits at the present time.  

As to competition, it is again largely between those in a position to dictate terms, have stable currencies, own and run their own key industries, services and resources and are not subject to a severity of loan conditionalities that ruin and diminish economic growth. Only a few countries can claim these privileges. Free market as a concept is sold to developing world nations at the expense of sovereignty.

To cite one example when the Iranian government was approached by Morgan Schuster in 1901; the division of control, ownership and share of profits of one industry was 84% to the Non Iranians while only 16% was allocated to Iran itself. Similarly as late as the 1940s the Iranian share of its own oil was a lot lot less than 50% while the British government's tax on the company that held the largest share was also itself greater than Iran.   

While I recognise there a few new faces in the field; namely India, China, Brazil, Russia, South Korea, Japan and to some extent Israel, they are not in the same league as those that reached their present position years ago.   

As you said I can agree to some degree even a free market can only work with minimal state interference. This is because western industrialised economies only achieved their current position through large and widespread state interference over many decades, along with some assistance from their empires.

Even this however, is not sustainable as state or global interference is a given. Free market on its own is a an enormous undertaking and major risk to all involved. The consequences are too grave for anyone except the richest nations.

The most advanced nations require heavy state subsidies from time to time and collapse of key industries, banks and other sectors is something to be expected from time to time. The US for example has had several such major busts since 1893.

KH_Hirsch

Yes, and most of the busts were man made. In general everyone wants to get rich based on the money or effort of others. Let's leave it at that, in economics as a theory all actors behave logically, have the same information about the market and can act in real-time and without barriers. Reality as we know it is very different.

Especially the part about the logical behavior.