00:00The Chinese foreign minister was talking and he did say she and Trump do respect each other.
00:07So a little bit of optimism ahead of that meeting between both of them.
00:12But let's just move on to another story now.
00:14And this is a really interesting one.
00:16For the first time this century, the U.S. government's debt burden is on track to exceed levels in both Italy and Greece.
00:27What does the IMF forecast actually show here?
00:30And is this a real big concern?
00:33It's crazy stuff, isn't it?
00:35Remember, it hasn't been that long, Leanne, that we were all talking about Greece debt levels.
00:39Was Greece going to fall out of the euro?
00:42You know, Greece and Italy were such the problem children, not just of Europe, but of the world economy.
00:47Now we have the IMF saying that U.S. debt is on track to exceed 143 percent of national income over the next seven years or so.
00:58That's way above Greece.
01:00That's way above Italy.
01:02Utterly remarkable stuff.
01:03And it means that the U.S. is now paying more to service its debt.
01:08So its debt interest is more than it spends on defense, which is actually, it's hard to get your head around that.
01:15But in answer to is it a problem at the moment, not yet.
01:19The U.S. can still borrow for 10 years at a rate of about 4 percent.
01:23Now, that's a lot higher than we saw during the great financial crisis, than we saw during the pandemic.
01:29But historically, that's still a pretty low borrowing rate.
01:33And the reason for this is because the dollar remains the global reserve currency.
01:38People, central banks, countries want to hold dollars.
01:41They pay for stuff in dollars.
01:43And when they hold, they don't just hold dollars.
01:45They also hold things that are denominated in dollars, like treasury bonds, treasury bills.
01:51It's quite fashionable right now to talk about whether the dollar will continue to be the world's reserve currency because of this U.S. debt,
01:59because of the erratic policymaking coming out of the U.S., I don't see any risk of the dollar being deposed anytime soon.
02:07So the U.S. will continue to enjoy that exorbitant privilege for quite a while longer.
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