The World Wide Web Of Debt

Tyler Durden's picture


Who owes what to whom?


Via BBC Business News:

USA: Although the US's overseas debt almost equates to its annual GDP, it is still regarded as a safe bet. However, its credit rating has been downgraded. Although Asia - primarily China and Japan - holds the majority of US debt, Europe has the second largest percentage. This means whatever happens in the eurozone will have a deep impact on the US banking system. Within Europe, the UK, Switzerland and France hold the largest amount of US debt, amounting to hundreds of billions of dollars.


UK: The UK has very large amounts of overseas debt, of which the biggest component is the banking industry. The high debt to GDP ratio is explained by the UK's active financial sector, where there is a great deal of capital movement. This level of overall external debt is generally not seen as a problem because the UK also holds high-value assets. Having said this, the UK economy remains in the doldrums and the country is highly exposed to Irish as well as Italian and Portuguese debt. The UK in turn owes hundreds of billions to Germany and Spain.


Germany: The biggest European economy owes France, Italy and the US most money. However, these economies also owe Germany billions in return. Regarding its relationship with the troubled eurozone countries, Germany is exposed to Greek, Irish and Portuguese, but mostly, Spanish debt. If any of these defaults, Germany will be hit. Its economy is slowing, mainly because of the problems plaguing its eurozone partners. And as Europe's industrial powerhouse, any problems in Germany mean more problems for the eurozone, but also for the wider international system.


Japan: The world's third-largest economy has the highest public debt level amongst developed economies. However, most of its debt is owed internally, so it is not seen as at risk of default. The global financial crisis, this year's earthquake and tsunami, a strong yen and Europe's debt crisis are clouding its current economic outlook. But the government has pledged to turn the country's annual budget deficit into a surplus by 2020.


France: Europe's second biggest economy owes the UK, the US and Germany the most money. However, like in Germany's case, these countries also owe France billions in return. France's problem is that it is greatly exposed to the eurozone's troubled debtors. Its banks hold large amounts of Greek, Italian and Spanish debt. This is causing market turbulence, especially against a backdrop of faltering French growth and low consumer spending.


Spain: Spain owes large amounts to Germany and France. However, its number one worry is bailed-out Portugal, which is indebted to it by billions of euros. As the country attempts to get its own debts under control, there are fears the country could be thrown back into recession after November's parliamentary elections. The bursting of a housing and construction boom in 2008 had plunged Spain's economy into a recession deeper than in many other European countries.


Portugal: Portugal, the third eurozone country to need a bail-out, is in deep recession. It is currently implementing a series of austerity measures as well as planning a series of privatisations to fix its shaky finances and reduce its debt burden. The country is highly indebted to Spain, and its banks are owed 7.5bn euros by Greece.


Italy: Italy has a large amount of debt, but it is a relatively wealthy country compared with Greece and Portugal. However, doubt about Italy's leadership and fears that its debt load could grow more quickly than the Italian economy's capacity to support it have left the markets jittery. France is most exposed to Italian debt.


Ireland: One of three eurozone countries to so far receive a bail-out, Ireland has introduced a series of tough austerity budgets. Its economy is now showing a modest recovery. After the boom years leading up to 2008, the country fell into recession as a result of the global credit squeeze, which ended the supply of cheap credit that had fuelled the unsustainable growth in its housing market. It shows a very high level of gross foreign debt to GDP because, although it is a small country, it has a large financial sector - including a big overseas presence. The UK is Ireland's biggest creditor.


Greece: Greece is heavily indebted to eurozone countries and is one of three eurozone countries to have received a bail-out. Although the Greek economy is small and direct damage of it defaulting on its debts might be absorbed by the eurozone, the big fear is "contagion" - or that a Greek default could trigger a financial catastrophe for other, much bigger economies, such as Italy.



Source: BBC, Bank for International Settlements, IMF, World Bank, UN Population Division

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Tue, 11/20/2012 - 14:47 | 2999434 monopoly
monopoly's picture

It is just all mind boggling. How can this go on much longer?

Tue, 11/20/2012 - 14:56 | 2999472 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Rule number seven, fights will go on as long as they have to....

Tue, 11/20/2012 - 14:51 | 2999444 Chupacabra-322
Chupacabra-322's picture

As I've mentioned in a previous thread.

We don't owe SHIT to these Globalist Criminals.  Tick tock, tick tock.  Get the rope out.  They're time is running out and they know it.  No where to run to, no where to hide. 

Tue, 11/20/2012 - 15:28 | 2999560 Skateboarder
Skateboarder's picture

If their heads don't roll, ours will. All it takes is a few meals to go bye-bye and Joe Average finally starts looking for answers... people to blame. Might be guaranteed just that when global supply chains unwind (and they will).

Tue, 11/20/2012 - 16:03 | 2999681 GFKjunior
GFKjunior's picture

I agree. Fuck em.


What can the powers that be do if we collectively all said "we're not paying".


Economic collapse? It's about time.


Tue, 11/20/2012 - 14:52 | 2999451 Aurora Ex Machina
Tue, 11/20/2012 - 14:57 | 2999473 yogibear
yogibear's picture

Bernake and the  fed will ensure the debt for the US gets much higher. Their promoting more debt and fiscal irresponsibility.

Tue, 11/20/2012 - 15:00 | 2999478 buzzsaw99
buzzsaw99's picture

They owe some of it to me bitchez.

Tue, 11/20/2012 - 15:00 | 2999481 Lmo Mutton
Lmo Mutton's picture

The sovereign debt of Lmo is hereby cancelled.

Tue, 11/20/2012 - 15:01 | 2999483 rosiescenario
rosiescenario's picture

Wondering how much debt got re-hypothecated???


All the makings for a nuclear seemingly small default can trigger a massive one....just as one bullet began WWI.

Tue, 11/20/2012 - 15:17 | 2999523 Silver Garbage Man
Silver Garbage Man's picture

Is this can't convince people to own precious metals, I don't know what will.

Tue, 11/20/2012 - 16:07 | 2999696 GFKjunior
GFKjunior's picture

Gold is the currency of kings, silver of gentlemen, barter is for peasants, and debt is the currency of slaves.

Men like us are far and few between.

Tue, 11/20/2012 - 15:19 | 2999529 Fíréan
Fíréan's picture

Though the headline states "The World Wide Web of Debt" the article is somewhat lacking. Excepting China where are the BRIC nations ? A few European countries, Japan, China UK, and USA ? I was expecting a "world", excuse me.

Tue, 11/20/2012 - 15:21 | 2999536 TWSceptic
TWSceptic's picture

If this doesn't convince people that all governments are stupid, I don't know what will.

Tue, 11/20/2012 - 15:22 | 2999545 woggie
woggie's picture

the beast is on the gobble and all that matters is we're all headed for it's belly

Tue, 11/20/2012 - 15:32 | 2999573 rosethorn
rosethorn's picture

What exactly are these "high value assets" the UK is supposed to control? Windsor Castle? Status as a center for money laundering?

Tue, 11/20/2012 - 15:50 | 2999640 falak pema
falak pema's picture

The Middletons like Anne Boleyn of old. 

UK only advances when there is a WOMAN who runs the country; its their greatest contribution to human progress! 

Tue, 11/20/2012 - 16:14 | 2999714 BurningFuld
BurningFuld's picture

Although they were kicked out of the US. They never gave up their land rights(?)  I'm just guessing.............

Tue, 11/20/2012 - 15:35 | 2999589 supafuckinmingster
supafuckinmingster's picture

God I love being Irish.

Tue, 11/20/2012 - 15:42 | 2999602 monopoly
monopoly's picture

The Latest Taxpayer Housing Bust With the election over, we learn that the FHA is insolvent.

Lets add a little more debt to the equation. And we pay these scum.

Tue, 11/20/2012 - 15:44 | 2999611 q99x2
q99x2's picture

Bank of Idiotic Settlements. That's a whole lot of repudiation.

Tue, 11/20/2012 - 15:46 | 2999617 falak pema
falak pema's picture

its nice to see that all the accounting is done in Euros; sign of the future times or swan song of dying age?

Tue, 11/20/2012 - 15:51 | 2999644 Seasmoke
Seasmoke's picture

just keep giving money to people who can not pay it back

Tue, 11/20/2012 - 15:57 | 2999659 ptoemmes
ptoemmes's picture

It all nets out to zero, right?


/sarc - just in case

Tue, 11/20/2012 - 16:00 | 2999671 kralizec
kralizec's picture

Looks like solar eruptions.  When does the planet-killer one hit?

Tue, 11/20/2012 - 16:00 | 2999672 Fox-Scully
Fox-Scully's picture

This is like a never ending Monopoly game!

Tue, 11/20/2012 - 16:08 | 2999700 All Out Of Bubblegum
All Out Of Bubblegum's picture

"Until you know who has lent what to whom, you know nothing whatever of politics, you know nothing whatever of history, you know nothing of international wrangles." -Ezra Pound

Tue, 11/20/2012 - 16:19 | 2999746 Shigure
Shigure's picture

The countries with the biggest debts also have the biggest financial sectors.

Just look at the UK foreign debt per person compared to the others - wow!

Tue, 11/20/2012 - 17:30 | 2999970 orangegeek
orangegeek's picture

The opening line says it all - US debt is the safest bet - meaning it will get paid back.  And when the rush demand for US Dollars arrives to pay back this debt, the dollar will rise faster.


The US continues to push higher.


And yes, Gold bulls won't agree - fair enough.  But US based technology runs the planet unlike any empire in history.  The US Dollar is a military back currency.  Gold is a factor, but not the prime component in the value of the US Dollar.

Tue, 11/20/2012 - 19:02 | 3000246 Bogdog
Bogdog's picture

Wow. For a minute there I thought there was a crisis. But when everyone owes everyone else doesn't it all cancel out? So let's just call it even and move on.

Tue, 11/20/2012 - 19:37 | 3000338 Tenshin Headache
Tenshin Headache's picture

Makes Iceland look awfully clever, doesn't it?

Tue, 11/20/2012 - 19:50 | 3000363 Bansters-in-my-...
Bansters-in-my- feces's picture

5 letters sums it up.....Ponzi

Wed, 11/21/2012 - 04:07 | 3001330 unicorn
unicorn's picture

and again no numbers on switzerland :(

Wed, 11/21/2012 - 08:35 | 3001516 justsayin2u
justsayin2u's picture

France is long Italy, Greece, and Spain - nothing to see here - move along.

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