| Country | External Debt % of GDP | Gross External Debt | 2009 GDP (est) |
| United States | 95.9% | $13.67 trillion | $14.25 trillion |
| Australia | 108.8% | $891.26 billion | $819 billion |
| Hungary | 124.2% | S$231.33 billion | $186.3 billion |
| Italy | 154.6% | $2.71 trillion | $1.76 trillion |
| Greece | 175.3% | $594.60 billion | $339.2 billion |
| Spain | 184.7% | $2.53 trillion | $1.37 trillion |
| Germany | 189.4% | $5.33 trillion | $2.81 trillion |
| Finland | 205.7% | $376.8 billion | $183.1 billion |
| Norway | 208.9% | $577.80 billion | $276.5 billion |
| Hong Kong | 218.8% | $659.27 billion | $301.3 billion |
| Portugal | 231.5% | $538.1 billion | $232.4 billion |
| France | 247.2% | $5.22 trillion | $2.11 trillion |
| Austria | 268.9% | $869.13 billion | $323.2 billion |
| Sweden | 275% | $916.42 billion | $333.2 billion |
| Denmark | 315.2% | $627.6 billion | $199.1 billion |
| Belgium | 345.6% | $1.32 trillion | $381.4 billion |
| Switzerland | 390% | $1.23 trillion | $316.1 billion |
| Netherlands | 395.6% | $2.58 trillion | $652 billion |
| United Kingdom | 427.6% | $9.26 trillion | $2.17 trillion |
| Ireland | 1,352% | $2.39 trillion | $177.3 billion |
Most of the countries outside the EU control their own currencies and can print money to cover their debts, and their citizens will have to live with the consequences. But it is hard not to conclude there is a looming world government debt crisis looming similar to what we are seeing in Greece today. Conventional wisdom is that government bonds are the safest investments in the world because they have the ability to tax and print money. But I'd feeling safer buying the debt of companies like Berkshire Hathaway, Exxon, Coke, Pepsi, Nestle, Microsoft, Cisco, or Proctor and Gamble who have strong market positions and financial discipline rather than governments who have left their finances deteriorate to these sorry states. What do you think?
Percentages are interesting. Carmen Reinhart, University of Md. professor, has co-authored a book recently that shows the importance of a country's debt relative to GDP. According to the research in the book the U.S. is close to the tipping point where countries go into slow growth mode.
ReplyDeleteHer site is http://terpconnect.umd.edu/~creinhar/
I think you are right, buying the debt of well run companies may be the better choice down the road.
Thanks for the reference. I'll have to check out Reinhart's book. I've those same warnings on the US debt sounded by a number of economists.
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