The possibly impending global economic meltdown explained. Snippet:

....The problem is that there are already enormous sums of dollars sitting in Chinese, Korean and Japanese Banks as well as the amount needed to offset transactions around the world. At the end of last year foreigners owned about $9.6 trillion in U.S. assets and we owned about $7.2 trillion in foreign assets leaving a net foreign investment (debt) of $2.4 trillion – three times what it was only four years ago and eight times what it was only a decade ago. In absolute terms that is at least hundreds of times bigger than the net foreign debt of any country in the history of the world. As a percentage of GDP, there are two countries, Australia and Portugal that have larger debts than the United States but the relationship between external debt and GDP does not provide the entire picture. The combined external debt of Australia and Portugal is about one four thousandth the size of the of the U.S. external debt. While the world economy could easily absorb the exports necessary to start paying down the debt of Australia and Portugal there seems little prospect of finding the more than half a trillion a year in new markets to absorb enough exports to begin to pay down the U.S. external debt. That debt will increase significantly again this year with a trade deficit that is approaching $600 billion. Furthermore, recent studies by a variety of analysts project the continued rapid growth of the U.S. external debt for the foreseeable future. In addition, the interest, rent or dividends that are due to foreigners who own U.S. assets ads even more to the debt. Even if U.S. assets are yielding no more than 2 or 3%, that increases the annual growth of the debt by an additional $50 to $60 billion....