US Leaders Argue Over How To Cut The $14 Trillion Debt, While European Ministers Try To Prevent Disaster For The Euro.

Last Modified: 16 Jul 2011 08:09
Courtesy Of "Al-Jazeera"



The world seems to be sinking in a sea of debt. In the US, Washington is battling over $14tn worth of debt. If a political deal is not reached in the next two weeks, the world's biggest economy will have to default. Ratings agency Moody's is deciding to review America's triple-A rating, with a possible downgrade, hitting the dollar and sending gold to a new record high.

Across Europe default is also a concern. The national debt of Italy - Europe's third biggest economy - now stands at $4tn. Servicing that will require $576bn by the end of the year.

Also European finance ministers met again in Brussels to talk about another bailout for Greece. The second package of loans to Athens is expected to be worth around $176bn.

And in Ireland, where Moody's actually cut the country's debt rating to junk status, there are warnings that a second bailout may be needed. But the European Commission has criticised the downgrade, saying Ireland is returning to growth.

Also on the programme - while Moody's has raised red flags on Chinese companies, so has another firm. Muddy Waters Research has cost some of the biggest investors on Wall Street a lot of money. One of the world's richest men John Paulson, lost around $110m when he dumped all his shares in a Chinese company called Sino Forest, after a scathing report from Muddy Waters accusing Sino Forest of "aggressively committing fraud" and being a "pump and dump" scheme.

And the humble cheque book, we take a look at why the UK government is thinking about phasing it out by 2018.