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Mats Kaarbø

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The World has More Than 40 Trillion Dollars in Debt, But To Whom?

The question is simple. To whom is the world in debt?

Source: http://www.economist.com/content/global_debt_clock

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    Oct 6 2012: .
    Country X owes country Y $50
    Country Y owes country X $55
    Logic would dictate that country Y owes country X $5
    But no, Country X owes country Y $50 and
    country Y owes country X $55
    • Oct 6 2012: Country X makes more money (through interest payments) on being a creditor for $55 and a debtor for $50 than on being a debtor for $5 if the interest rate on the $55 debt is higher thant that on the $50 debt. That's why you need permission from both countries if you want to cancel out parts of the debts against each other.

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