Bankruptcy of a Country vs. Bankruptcy of Its People

As specialists say, the USA is not a bankrupt country, and financial default is not threatening them in the near future. So there is no need to fear that dollar will collapse. As the chief economist of Capital Economics in the USA claims, the pure value of assets in the American economy has surpassed the gross domestic product by 550%. The amount of GDP made something like $15 trillion. The federal debt, at the same time, was not higher than $16.8 trillion. It seems that America has got trapped in a super-cycle of debts. Still, after the calculation of the value of inner assets, the growth of debts at the credit market and of total financial obligations does not look that outrageous.

The States have no great debts to other countries. 16% of all US Treasuries belong to federal reserves, 11% are possessed by China and 10% by Japan. Taking into consideration the fact that the United States possesses federal assets of other countries and other factors, it is possible to say that pure American debts make some 30% of the GDP. In this situation, the danger of a dollar collapse is very small.

What Happens to the Population

Man with empty pocketsStill, the population of the USA is getting closer and closer to the verge of a collapse, as other specialists say. The national habit of living on credit leads many people to financial troubles, normally due to one small credit that is not paid back on time. Any bankruptcy lawyer in Peoria Arizona or Albuquerque, New Mexico will prove that the number of those people who cannot pay their debts back is only growing. Despite the global financial crisis and the danger of very serious consequences, people keep on taking credits and mortgage loans, often overestimating their financial abilities. As a result, they often lose the real estate or other possessions they have, and foreclosed houses are offered by real estate agencies at very low prices. Fighting for at least a part of their finance, lenders sell property at any possible price, making the real estate market collapse too.

In short, one symptom of the crisis leads to another one, and this chain gains new and new links. As specialists say, there is no big hope for an abrupt positive change because the crisis is so deep. It will take some time for the situation to improve and become more or less even and stable again.

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Posted by on May 2 2013. Filed under Legal. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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