1980-2006: Third World Nations Pay Over $7 Trillion Servicing External Debts

As a result of Paul Volcker’s tightening of the US money supply (see October 6, 1979), 145 developing and emerging market economies pay a total of $7.673 trillion (in current dollars) in order to service their external debts. $675 billion of this money comes from Africa, the poorest continent in the world. Despite these massive payments, the external debt held by these nations actually increases from $618 billion in 1980 to $3.150 trillion in 2006. [Nakatani and Herera, 6/2007]