If the question is asked of the United States, guess what, the rest of the world owns this country, thanks to the mounting trade deficit. This little summary sent out by our friends at the Economic Policy Institute has a pretty sobering first paragraph:

Mounting trade deficits have caused the United States to incur rapidly growing obligations to foreign investors. To finance the nation’s trade deficits, the United States must sell off more of its assets to foreign investors or reduce the stock of U.S. assets held overseas. According to the data in the latest report from the Bureau of Economic Analysis, the U.S. net international investment position (NIIP) deteriorated sharply from 1985 through 2005, as the asset sales necessary to finance trade deficits transformed the United States from the world’s strongest international asset position to the world’s largest liability position.

In English, yikes. The biggest problem is that much of the way the U.S. finances this debt is via treasury bonds. At some point, foreign investors will want a better return on the debt they purchase–which will force interest rates higher. It will not make for a pretty picture.