World Economic Problems

Posted by Casey P.
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The current economic problems as experienced in the Euro zone and US are basically the results of over expanding and spending on the parts of the people and governments of the respective countries. These countries and its citizens have been enjoying the various welfare facilities provided without the corresponding increase in productivity and competitiveness.
With the slide in competitiveness, these countries resorted to importing more products for consumptions causing further increase in balance of accounts deficits.
The US resorted to printing moneys to meet the debt repayments and consumption requirements. China and Japan which combined hold the largest treasury debts run the risks of debt write off should the US fails in its debt repayment responsibilities.
And this risks is very real as times goes on when the US has not provided any real tangible and workable solutions to the problems.  
China, being the largest holder of US debts, therefore should in the future be extra cautious in purchasing US debts.