Who lends money to top developed countries like Japan and US? -

I keep hearing about national debts faced by Japan and US. So, who is the big money-lender (person or organisation) to them? If this person or organisation has the means to do so, where in turn does his/its wealth come from? Is it the banks? Some people say China is the money-lender but if China is capable of lending, wouldn t it be the RICHEST nation in the world??? Anyone with good economics background to enlighten me?

Mostly ordinary people do the lending, primarily through their savings accounts and retirement accounts. However, the single largest lender to the United States government is China. The central bank of China holds about $1 trillion in cash reserves. The entire American banking system only has about $46 billion in reserves. The Federal Reserve System recently released a report asking if the United States was insolvent. The basic answer was yes, the more complicated answer was that if we default on veterans pensions, civil service pensions, end the prescription drug program, reduce social security and end military spending, then we can pay our bills. Otherwise, the current obligations exceed the present value of all current and future privately owned property in the United States. Money is a storage unit for claims on future production, it has no value in itself. The exception happens to be pennies and nickles because the melting value of them exceeds their stated value. Everytime you buy a savings bond, put currency in your pocket, buy a certificate of deposit, place money in a bond fund, you are making loans to society. For a while China was loaning the US $1 billion per day to keep the lights on, but they have shut off the tap, and now the banking system is in a liquidity crisis because the cash has stopped flowing. The good news is eventually China will spend its money and it nearly is the richest society. It is catching up, but it isn t rich per capita. It is still quite a poor nation.

China