Caitsith.Neonracer said:
So what does this mean, Jaerik, overall, will either Japan be in debt to USA, or will USA be in debt to Japan?
I'm worrying more about the CDN economy, not the US market.. but nonetheless, very curious.
It means the US is in debt to Japan in a sense. The US government issues bonds to fund its activities, and other countries buy this because its still a very secure investment (think of yourself putting your money in a savings account at a bank, then the bank uses that money for its operations, and also pays you interest).
The danger is, if many countries feel the government bond is not secure enough anymore, they'll all withdraw their money and bankrupt the government. How secure it is depends on the health of the country's economy in general and the deficits the government is carrying.
EDIT: a bit late posting I see lol.