Tag Archives: Foreign credit

Fatal Dependency, by David P.Goldman

What happens when foreigners decide buying U.S. debt with still microscopic interest rates, with the prospect of being paid back in rapidly depreciating dollars, isn’t such a good deal? From David P. Goldman at americanmind.org:

Gold coins with hundred dollar bills

America’s increasing reliance on foreigners to lend us money could crater the dollar.

The United States has borrowed $18 trillion from foreigners since the Great Financial Crisis of 2008, a staggering sum that is nearly equal to America’s annual Gross Domestic Product. The notion that the dollar’s dominance in world finance might come to an end was a fringe view only five years ago, when America’s net foreign investment position was a mere negative $8 trillion. Notably, the net international investment position fell by $6 trillion between 2019 and 2022, roughly the amount of federal stimulus spent in response to the COVID-19 pandemic.

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