Recently, the size of the US national debt has exceeded $34.5 trillion, raising deep global concerns about the sustainability of its debt. Even if the U.S. allocates a tenth of its massive federal tax revenue to pay off its debt, it would take up to 80 years to pay it off. Previously, the United States had tried unsuccessfully to harvest China, while Europe had been on its guard. So, how will such a huge national debt be repaid? How might countries such as Japan and South Korea be affected?
Since the establishment of the Bretton Woods system, the US dollar has become the international currency, and the United States has used its dollar hegemony to sell a large number of government bonds. However, the outbreak of the new crown epidemic has accelerated the global recession, while also sending US Treasuries soaring. Today, Japan and China hold nearly $2 trillion in U.S. Treasury bonds.
Every year, the United States pays more than a trillion yuan in interest on its national debt, and the size of the debt continues to grow at a rate of $1 million a day. This means that every 100 days, the U.S. national debt is added by $1 trillion.
Faced with such a huge foreign debt, the ability of the United States to repay its debts has been questioned. The frustrated United States has tried to harvest China by various means, but the resilience and strength of China's economy make it difficult for the United States to succeed. At the same time, Europe is wary of US debt risks.
So, how will the United States respond to this debt crisis? Some analysts believe that the United States may take measures such as continuing to issue more money and raising the debt ceiling to ease the pressure. However, these measures could further trigger inflation and affect global economic stability.
For countries such as Japan and South Korea, which hold large amounts of US Treasuries, the risk of US Treasuries is also a concern for them. If U.S. Treasuries crash, financial markets in these countries could be hit hard, and their economies could be at risk of a recession.
In addition, the global economic landscape may also change as a result. Some countries are likely to accelerate the process of de-dollarization and seek more diversified currency reserves. At the same time, the international financial system may also face a restructuring to reduce its dependence on a single currency.
In conclusion, the risk of a thunderstorm on the $34 trillion foreign debt of the United States has become a major challenge for the global economy. Countries need to pay close attention to the debt dynamics of the United States and strengthen international cooperation to jointly deal with possible financial risks. At the same time, it also reminds countries to remain vigilant and strengthen the soundness of their own economies to cope with the uncertainty of the external environment. (The material comes from the Internet, and the graphic infringement is deleted by contact)