External debt are the funds a nation, and its businesses and citizens, owe to lenders outside the home country. Using sources like the World Bank, the IMF and Wikipedia, one is able to develop a rough estimate of the external debt of 205 countries. If the estimates are correct, these countries owe $76.9 trillion in dollar terms. The biggest countries in Europe may have external debt of $40.6 trillion. The U. S. and Canada owe $21.4 trillion, overseas. Asia has $11.1 trillion with the remaining debt spread among counties across the globe who owe less than $25 billion apiece.
A 1 percent increase in the cost of debt globally would result in a need to increase interest payments by $769 billion dollars. A 2 percent increase, which is close to what has been the rise in the effective Fe Funds rate, if spread globally, would force nations to increase their payments by $1.5 trillion.
The point here is that persistent rate increases in the United States may be having very negative impacts on the global economy. When well over 100 nations see the value of their currencies drop it is highly unlikely that the United States can pursue its economic goals unaffected.
In the mid-1980s when the Fed in the United States created a similar problem, the largest nations came together at the Plaza Hotel in New York and forced a change in approach. One must start thinking about a similar conference if the current trends continue. They cannot be ignored.
The poet John Donne wrote many decades a go that “no man is an island.” In a global economy, no nation is either.