Advanced Government Countries Call For $10.2 Billion for 2011 Financing Needs

Japan and the United States are among the top advanced nation governments needing to borrow the most in 2011. Financial debts have risen to levels that haven’t been experienced since the after effects of World War II. According to estimates from the International Monetary Fund, Japan, the United States, and 13 other major developed-country governments will have to raise $10.2 trillion. This estimate is up 7% from last year. Most countries are not having problems raising the money needed to finance their budget deficits. Even so, there are issues related to the increased borrowing. Some of these concerns include, rising interest rates, continued tapping of government borrowers into smaller international capital flows, and increased pressures on China to allow its currency to appreciate against the dollar. In the U.S., the Federal Reserve recently said it will buy $600 billion of U.S. government bonds over the next eight months in an effort to drive interest rates down and promote more borrowing and growth. Where recovery is a primary focus right now, the chances that investors will lend to governments is highly unlikely. In the end, risk of serious financial trouble is growing as global borrowing is increasing.