Discussion
please dont totally ridicule me here, i know its probably a dumb question.
these are just examples:
we owe 700 billion
spain 500 billion
etc
etc
well i sort of understand we owe it to the world bank.
who is the world bank?, and whose money is it in reality?
if many large economies all owe money,why cant we just all say lets scrub all debts up to 2 or 300 billion.
i dont understand where the money goes and whose money it is.
could someone give me a quick idiots guide.
ragjoy
these are just examples:
we owe 700 billion
spain 500 billion
etc
etc
well i sort of understand we owe it to the world bank.
who is the world bank?, and whose money is it in reality?
if many large economies all owe money,why cant we just all say lets scrub all debts up to 2 or 300 billion.
i dont understand where the money goes and whose money it is.
could someone give me a quick idiots guide.
ragjoy
ragjoy said:
please dont totally ridicule me here, i know its probably a dumb question.
these are just examples:
we owe 700 billion
spain 500 billion
etc
etc
well i sort of understand we owe it to the world bank.
who is the world bank?, and whose money is it in reality?
if many large economies all owe money,why cant we just all say lets scrub all debts up to 2 or 300 billion.
i dont understand where the money goes and whose money it is.
could someone give me a quick idiots guide.
ragjoy
Companies and other countries.these are just examples:
we owe 700 billion
spain 500 billion
etc
etc
well i sort of understand we owe it to the world bank.
who is the world bank?, and whose money is it in reality?
if many large economies all owe money,why cant we just all say lets scrub all debts up to 2 or 300 billion.
i dont understand where the money goes and whose money it is.
could someone give me a quick idiots guide.
ragjoy
ragjoy said:
please dont totally ridicule me here, i know its probably a dumb question.
these are just examples:
we owe 700 billion
spain 500 billion
etc
etc
well i sort of understand we owe it to the world bank.
who is the world bank?, and whose money is it in reality?
if many large economies all owe money,why cant we just all say lets scrub all debts up to 2 or 300 billion.
i dont understand where the money goes and whose money it is.
could someone give me a quick idiots guide.
ragjoy
It isn't a dumb question at all, so don't worry.these are just examples:
we owe 700 billion
spain 500 billion
etc
etc
well i sort of understand we owe it to the world bank.
who is the world bank?, and whose money is it in reality?
if many large economies all owe money,why cant we just all say lets scrub all debts up to 2 or 300 billion.
i dont understand where the money goes and whose money it is.
could someone give me a quick idiots guide.
ragjoy
We don't owe it to the world bank. There isn't a world bank. The International Monetary Fund is close, but it isn't the same.
Every now and again, the government needs to raise money because Tax receipts are not enough to meet the outgoings. The government issues "bonds", and "institutions" buy these bonds.
A "bond" is a piece of paper. It has a value - say £100.00. It also has an interest rate - say 2.5%. That means that every year the bondholder (owner of the "bond") gets £2.50. Just to make it more difficult for the man in the street to understand, these government bonds are known as "GILTS".
Who buys these bonds? Well, pension funds are big buyers. The pension funds like to spread the risk of their investments. Government bonds are seen as low risk investments, so the pension funds like them. Some foreign governments also like them. In particular, the Chinese.
It is late, and I will continue my answer tomorrow. Tell me if I am not making sense so far.
Don
--
don4l said:
ragjoy said:
please dont totally ridicule me here, i know its probably a dumb question.
these are just examples:
we owe 700 billion
spain 500 billion
etc
etc
well i sort of understand we owe it to the world bank.
who is the world bank?, and whose money is it in reality?
if many large economies all owe money,why cant we just all say lets scrub all debts up to 2 or 300 billion.
i dont understand where the money goes and whose money it is.
could someone give me a quick idiots guide.
ragjoy
It isn't a dumb question at all, so don't worry.these are just examples:
we owe 700 billion
spain 500 billion
etc
etc
well i sort of understand we owe it to the world bank.
who is the world bank?, and whose money is it in reality?
if many large economies all owe money,why cant we just all say lets scrub all debts up to 2 or 300 billion.
i dont understand where the money goes and whose money it is.
could someone give me a quick idiots guide.
ragjoy
We don't owe it to the world bank. There isn't a world bank. The International Monetary Fund is close, but it isn't the same.
Every now and again, the government needs to raise money because Tax receipts are not enough to meet the outgoings. The government issues "bonds", and "institutions" buy these bonds.
A "bond" is a piece of paper. It has a value - say £100.00. It also has an interest rate - say 2.5%. That means that every year the bondholder (owner of the "bond") gets £2.50. Just to make it more difficult for the man in the street to understand, these government bonds are known as "GILTS".
Who buys these bonds? Well, pension funds are big buyers. The pension funds like to spread the risk of their investments. Government bonds are seen as low risk investments, so the pension funds like them. Some foreign governments also like them. In particular, the Chinese.
It is late, and I will continue my answer tomorrow. Tell me if I am not making sense so far.
Don
--
I am no expert, which is why my comment was useless I didn't want to say something stupid.
There are several people on here who can explain it very well, or I could try and find the post from the other week.
Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff