Posts Tagged ‘US National Debt’
Forex Fundamental Analysis – The Greenback Under Pressure on All Fronts
Tuesday, September 8th, 2009With a reference to the X-factor in forex markets: the US National Debt. As a matter of fact, the surging debt is just among various factors that’s exerting downward pressure on the Greenback, although it’s maybe the one that receives the most attention, and it likely represents the most pernicious threat to the Dollar’s long-term viability as the world’s reserve currency.
It’s hard to say certainly how big the federal government debt presently is, and even more difficult to forecast. We can begin by looking at gross debt (Treasury securities) outstanding, which is around $11.4 Trillion. Since half of this represents intra-governmental debt, debt owed to external parties is probably about $6 Trillion. Going forward, meanwhile, the latest government projections indicate a $9 trillion increase over the next decade, touching a whopping $20 Trillion in 2020. In absolute terms, it would smash all previous records, while in real terms (as a percentage of GDP), it would be the largest increase since World War II.
