This paper suggests that a looming global financial crisis caused by the USA’s own huge debts may create conditions for mass defaults or repudiations of illegitimate debts by Southern governments.
The United States of America is the world’s largest debtor. The US net international investment position, a broad measure of indebtedness that includes private foreign investment as well as bonds and loans, reached $2.48 trillion at the end of 2004. This is the amount by which gross foreign-owned assets in the USA ($11.53 trillion) exceeded US-owned assets abroad ($9.05 trillion). The net amount is almost equal to the total debt of all developing countries, $2.6 trillion as measured by the World Bank without taking into account direct investments. If US trade deficits continue to grow at their current pace the net debt could reach $7 trillion by the time George W. Bush leaves the White House in 2009...
KAIROS: Canadian Ecumenical Justice Initiatives