If every country in the world, including the USA, has a foreign debt, to whom, where or what is it all owed?

Question

It seems to me that some entity - at some time, uh, I don't know when - must be in for a large windfall!

Do you believe that a lot of deception exists in the world of finance?

Is it realistic to believe that a nation's wealth is stored in gold bullion in a vault somewhere?

Is Fort Knox really a lot of BULL-ion?

Why isn't some of that alleged bullion being used to pay off some of the foreign debt of the United States or even to feed and look after its own people, as well as others? Isn't it really a waste of gold chains that could be made out of it? After all, gold only has an ascribed value due to its status as a precious metal, not a major intrinsic one.

Do you believe that money is really created out of thin air in the form of credit, issued by the major world bankers, who have chiselled some kind of monopoly (over what, I don't know, maybe hot air)?

You may wish to refer to the following article for more insight:

http://www.savethemales.ca/000550.html

The article listed in the initial posting:

http://www.savethemales.ca/000550.html

is titled 'Mankind's Unmentionable Secret'.

A lot of good answers have been provided. It is hard to choose. I am therefore putting the question to avote.

Answer 1

First of all, what you call a country's international debt is in fact the government's international debt. Governments borrow from private sector, and some of this borrowing just happens to be international.

So your question about nation's wealth and gold bullion is irrelevant. The wealth that creditors count on when they lend to a governmnet is tax revenues, not gold bars.

Answer 2

Money is a metaphor.

The value of money is a matter of international consensus. It is based on a combination of variables, such as balance of trade, national debt, gross domestic product, etc.

When a country budgets expenditures beyond its projected revenues, it must borrow the difference. This is called the country's deficit. Deficits that are added to previous deficits total up to a nation's debt.

That debt may then be purchased by any entity that has the money. At one time, about a third of the United States' national debt was held by a small consortium of Japanese banks.

The global nature of today's economy means that U.S. banks may own some of Argentina's debts (if they think it's a good investment) and Argentina banks may own Greek debts.

[Jeckel Island is off the coast of the State of Georgia. At one time it was wholly owned by a group of millionaires from New England. However, the "Millionaire's Club" has been shut down since World War II and none of the super-rich inhabit the island any more. The book that you were referred to by another respondent is right-wing propaganda that is not based in fact.]

Answer 3

Most governments have debt just like most individuals have debt. Most of our debt is owned by companies and individuals in the U.S. Every month I have money taken out of paycheck to buy savings bonds, so I even own some of it. Japan, China, and oil producing countries buy a lot of it too. That's what they do with many of the dollars we give them for their oil, inexpensive clothes, furinture, etc. Since these foreign countries tend to buy our government debt rather than our goods and services in exchange for the goods and services they give us, we have a trade deficit.

Our budget and trade deficits a currently huge, and a bit of a worry to some international macroeconmists. A good one with a blog is Brad DeLong.

Take an introductory course in macroeconomics. And don't buy wacko conspiracy theories on the internet. If someone's claiming to be an expert, you should be able to find a lot of information about them and how they developed that reputation.

Answer 4

The countries owe it to each other and the international banking cartels.

The entire world banking system is built on deception and fraud.

There is not one gram of gold in Fort Knox, it has all been transferred to the international banking cartels.

Read the book "The Creature from Jeckel Island" ( a real location) for better understanding of this subject.

Answer 5

Not every country in the world has a foreign debt. Some countries are running a trade surplus.

The total trade balance in the world when accounting for every country is close to 0. It will never be 0 due to statistical errors and underground markets. (one econs textbook says undisclosed trade with martians)

Answer 6

the countries they trae with. this is why we have gdp and gnp and trade deficite