In a few month the United States could be in really big trouble. We are a county that is seen to be the richest, but in fact, if countries, such as China, were to collect on the debt that we owe, we would become the worlds poorest country.
At this point in time the US debt is at $14,229,117,***,*** and rising almost $10,000 a second.
"The US may reach its congressionally-mandated debt limit of $14.3 trillion in a few months, which could lead to a default, Yu Yongding ,former Chinese central bank advise states. said on Thursday. If the US were a euro-zone nation, a default or bailout would have happened long ago, said Yu, who is president of the China Society of World Economics and a former adviser to the People's Bank of China." (China Daily)
A default occurs when a debtor has not met his or her legal obligations according to the debt contract, e.g. has not made a scheduled payment, or has violated a loan covenant (condition) of the debt contract. A default is the failure to pay back a loan, and China is even contemplating if it makes more scene to diversify its spendings rather than invest in the United States as much as it had previously. Would you invest in a person who doesn't pay you back?
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