Why are the countries with the largest foreign debts also the richest countries ? Can somebody explain ?

Answer 1

A great deal of nonsense is written about the size of the US debt owed to other countries such as China. The Chinese government owns about $1 trillion dollars of US government securities because it wants to continue to export much more to the US than it imports from the US. The Chinese government does this is done by maintaining an artificially low value of the Chinese yuan compared to the dollar. The surplus in dollars received from China's huge exports to the US is then invested in US government securities.

This is not a problem for the US but is a problem for China. The only way that China can ever get the $1 trillion back is to turn everything around and to import more from the US than it exports and eventually use up the $1 trillion paying for imports from the US. If it tries to covert the $1 trillion dollars back into yuan, this will drive up the exchange rate for the yuan decreasing Chinese exports and increasing imports with the same result. We have the advantage over the Chinese, not the other way around. We have all those cheap products from China that you find at WalMart plus $1 trillion of their money. Who is stupid?

Answer 2

The country with the highest national debt in world history is the USA. The Chinese hold a major portion of this debt and have the power to control the american economy.
The richest is probably Saudi Arabia or Brunei.

Answer 3

Arich person or Rich country can easily get credit facility and can clear it also as quickly as the credit is accumulated. Problem arises only when such countries come to be ruled by imprudent rulers who throw caution to winds and abuse the credit facility, accumulating credit far more than what two or thtree generations of the population can find difficult to repay.

Answer 4

the one with the most debt is europe cause and the richest is america cause we own

Answer 5

I think the reason is that since rich countries feel powerful, they over spend, kind of like people that win the lottery.

Answer 6

You have to look at it relative to GDP....The US has a high GDP and Uganda has an extremely low one in comparison to debt

Answer 7

If you do not have money, or other assets, try to go to the bank and borrow. They will show you the way out.

Answer 8

Some take risk, seek action and find it. Wheel and deal...

Answer 9

Because their governments are corrupt, and are run by mercenaries.

Answer 10

because they are continuously raping other countries for anything of value.