The public debt of the United States for the first time in history exceeded the mark of twenty trillion dollars. This is approximately 125 annual budgets of the European Union this year. So why do we keep part of our rainy day stash overseas?
“ American expenses exceed income,” says Alexander Razuvaev, candidate of economic sciences, director of the analytical department at Alpari. - Take at least their military budget - it is simply cosmic (in 2018 it will be 692 billion dollars against our 69 billion - Ed.). To cope with this load, they borrow money all over the world. The US Treasury sells its bonds and other countries buy them. Accordingly, America borrows money at a fairly small percentage, because their bonds are considered risk-free - they can always be sold if desired.
“ The United States , following the British Empire, created a system in which the whole world pays for their existence,” continues economist Mikhail Delyagin. - It just so happened that the US public debt at the moment is really the most reliable financial instrument.
“Firstly, the printing of dollars will provoke high inflation in the United States itself,” said Anton Shabanov, an independent economic expert. - Secondly, the dollar is the world's reserve currency, and if you print so many extra bills, the value of the dollar and other assets in the world will greatly decrease.
“This is a trap,” Delyagin is sure . “ Washington is not going to pay the public debt – it is simply impossible, so the pyramid will grow until it collapses. And this already happened in 1971 during the so-called Nixon shock: the States abandoned their obligations to exchange dollars for gold and vice versa, which actually meant the bankruptcy of the country. At that time, they got away with it, because of impunity, this could happen again.
“There are always risks,” Razuvaev confirms the words of his colleague . - When the First World War began, bonds of Germany and Russia were considered risk-free bonds . But the Bolsheviks defaulted and renounced their debts altogether, the Germans did the same.
“To prevent this from happening, the entire US foreign policy is aimed at creating controlled chaos in different parts of the world,” Delyagin replies. - There are invasions in different countries - Syria , Iraq , Lebanon , "color" revolutions are arranged - in Ukraine , in Georgia , Egypt . As a result, the US offers itself to frightened capital as the only safe haven. And it works!
“The Americans are satisfied with everything, so this system will continue to work,” says Alexander Razuvaev. - Moreover, the Federal Reserve (an analogue of the Russian Central Bank . - Ed.) Slowly raises the interest rate. That is, the cost of servicing the US debt will grow, and in any case it will be necessary to close all this at the expense of new loans.
“The US national debt and the Russian economy are connected at least by the fact that in their 20 trillion dollars, about 109 billion dollars are ours,” says Delyagin. - At the same time, in August, the United States adopted a law on anti-Russian sanctions, where, among other things, there is a study of the consequences of freezing these our 109 billion. President Donald Trump signed this document. And so far, there are no signs that Russian liberals are doing anything to save Russian money. And the money is in danger, given that the Americans have recently taken away diplomatic property from us.
— I do not think that the USA will seize our funds, otherwise they will lose the status of a first-class borrower, — Alexander Razuvaev objects. — And we don't have that many American bonds. We have 109 billion in US securities with over $400 billion in reserves. Well, if we assume that the arrest did take place, then Russia can simply stop paying its foreign debts.
And why keep money in a country hostile to us?
“You have to go to rallies for politics and ideology, but the economy works according to completely different laws — the laws of rationality,” says economist Alexander Razuvaev. - The dollar is the only world reserve currency, and accordingly, the fact that we keep 25% of our reserve in the dollar is completely normal. This is, if you like, maintaining the stability of the ruble exchange rate. As long as the US remains the largest economy in the world and the most reliable borrower, we will keep our 25% with them. And no matter what happens in politics, money will not be affected, because the United States will immediately lose face. Although, of course, there are reliable German government bonds, gold - all this is also in the reserves of our Central Bank.
"It's not as scary as it seems"
“There is no need to be afraid of anything,” economist Nikita Krichevsky is sure. - The current size of the US public debt has two circumstances that significantly reduce the severity of the problem. First, the US government debt is not the highest in relation to GDP countries. After the war, their debt amounted to 125-126% of GDP, and now 105% (in other words, the amount of US debt is greater than the cost of all goods and services produced by Americans in a year. - Ed.). And secondly, no matter how anyone would like, but the American economy is strong. US government bonds today are the most stable and reliable way to invest free funds. This explains the fact that the interest on these government bonds is very small, that is, the interest on servicing the US government debt is minimal. For comparison: Russian bonds last year were sold at a rate of up to 10% per annum. In the United States 1.5 - 2% depending on the term.
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