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This article from the John Hopkins University experts in Chinese investment in Africa say the charges that China was setting up debt levels for African countries beyond sustainability levels set by IMF are not founded except in a few instances. Only in Congo, Zambia and Djibouti does China account for over half of public debt, says the report. This comes as criticism is mounting about African countries being burdened with debt from Chinese financing of projects and loans.

In 17 countries identified as vulnerable including Ethiopia and Cameroon, China was the largest creditor but yet more than half of the debt was held by western banks and other lenders. In Mozambique it was Credit Suisse bank. In other words China is not preying intentionally to put countries into financial distress from debt buildup.

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Corporate debt may be the next problem facing the economy after the housing crisis. How "distressed investors" hope to invest some of the $300 billion raised to buy up some of this debt at rock bottom prices.

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Seniors represented 23% of the Japanese population and 29.5% of spending in the budget in 2010. The rapid aging of the population has increased concern about the large deficit. Japan's parliament passed legislation that would double the sales tax to 10% by 2015.

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The U.S. Federal Reserve Flow of Funds report for 2011 shows Fed purchases of 61% of total net Treasury issuance. Goodman points out that the net issuance of Treasury securities for covering U.S. budget deficits is normally 0.6% to 3.9% of GDP on average for the last six decades since 1950, compared to on average 8.6% of GDP today. A big jump in Fed purchases with a corresponding steep fall in the participation of foreigners and the private sector. Foreign purchases declined from 6% of GDP in 2009 to 1.9% of GDP in 2011. U.S. private sector- mutual funds, banks, corporations and individuals- purchases declined from 6% of GDP in 2009 to 0.9% of GDP in 2011. This helps keep interest rates low and funds U.S. government needs. Lawrence Lindsay pointed out in the WSJ in 2011 that Fed has itself boxed in being forced to keep interest rates low for years. If the government borrowed at a more normal rate of 5.7%, instead of the Fed induced rate of 2.5% today, Lindsay estimated the U.S. government would face an additional $800 billion in interest costs by 2021....

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The authors of this op-ed cite Federal Reserve Bank of New York studies that show ony 56% of borrowers of student loans from the government are making payments. The U.S. government does not correctly reflect its liabilities on these loans by treating all the loans as an asset.

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In his annual budget speech to Parliament, chancellor of the Exchequer, Alistair Darling, said things are much worse than appeared 5 months ago. Britain will have to borrow 57 billion more pounds, and the budget deficit is to reach 175 billion pounds or $255 billion. The British economy will shrink 3.5% thisyear instead of the 1.25 percent predicted in November, 2008 This is the highest deficit of any nation in the G-20. Britain's net borrowing is exppected to reach 11.9 percent of GDPin 2010, and finances can't be balanced before 2016. In March 73,000 jobs were lost for a total unemployed of 1.46 million. With smaller numbers of people paying income taxes, and smaller corporate tax revenues, the revenues are just not there for Britain to spend heavily to make its way out of this recession. The renewable energy projects like wind farms and biotechnology are small, and shows the government has difficulty paying for larger programs. In an effort to increase revenures the government imposed a tax of 50%, up from the current 40%, on individuals earning more than 150,000 pounds, which was promptly criticized by the British Chambers of Commerce as a disincentive to bring talent to London as a world financial center. Darling also added acar-scrapping scheme like the one in Germany. Opposition leader David Cameron said in Parliament "everyone can see the utter mess this government made of the British economy. Our children will be in poverty for decades." ...

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The way in which the subprime mortgage crisis is affecting Germany. How mid sized German banks formed conduits like the larger banks in Europe and expanded them to the point where their conduits were as large as those of the large banks. Lacking the resources of the larger banks these banks were the first to fall in this crisis. Conduits are off balance sheet affiliates that borrow using short term commercial paper to invest in longer term securities. Its critical that they have access to capital borrowing because the commerical paper has to be renewed. In a crisis like this one if the borrowing ability vanishes because of perceived risk by lenders then the whole operation can blow up. So the German central bank had to intervene to support 2 of these institutions IKB Deutsche Industrie Bank and Sachsen LB and organize a rescue operation. The background of how these stateowned banks got into this conduit business is explained here and information available on their exposure to USA subprime mortgage securities. ...

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Pakistan's foreign currrency reserves of $8.14 billion as of Sept 27 and falling for 14 straight weeks, falling from $16.39 billon in November 2007, are creating a situation in which Pakistan may have to turn to the IMF for emergency assistance. Especially because this covers hardly 2 months of imports of food and oil.