Cash in on the worlds biggest bankruptcy

Despite the recent rash of expensive bailouts, the most indebted country in the world is neither the UK nor the USA. And with $7.8trn in debt, it could soon be heading towards bankruptcy. Here's one way to profit from that slide.

The media have given London a new nickname: Reykjavik-on-Thames. Britain's economy revolved around banking. British banks hold about $4.4trn in foreign debt. The total size of the UK economy is $2.1trn. This year, the British government nationalised major parts of the UK's banking system. In total, the UK Treasury is on the hook for over $2trn in potential liabilities, according to an estimate by the Office of National Statistics.

But Britain is not going to be the world's biggest national bankruptcy. The government debt of the United Kingdom is only around $950bn... or about $15,000 per capita.

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