The credit rating agencies have got us, coming and going. First they help cause the biggest economic calamity since the 1930’s. And now they tell us we can’t take the fiscal measures needed to get us out of this mess. Meanwhile, they are laughing all the way to the bank (that is, if they can find one that is still solvent). Why are we still listening to them?Lire la suite
Speaking to reporters today, newly confirmed Treasury Secretary Tim Geithner all but dismissed the idea outright:
The issues paper prepared by Financing for Development Office at the United Nations in preparation for the multi-stakeholder consultations on sovereign debt for sustained development states that ‘The expectation is that stake holders will want to focus their discussions on practical and realizable policies and processes for managing external sovereign debt.’ If these discussions are to have any lasting value, however, they require a dual focus. Creditor-debtor relations do not exist in a (...)Lire la suite
This paper suggests that a looming global financial crisis caused by the USA’s own huge debts may create conditions for mass defaults or repudiations of illegitimate debts by Southern governments.
The United States of America is the world’s largest debtor. The US net international investment position, a broad measure of indebtedness that includes private foreign investment as well as bonds and loans, reached $2.48 trillion at the end of 2004. This is the amount by which gross foreign-owned (...)
In 1978, Erwin Blumenthal (an IMF-man appointed to run Congo’s central bank) reported that large amounts of lenders’ cash had gone missing and that there was "no chance, I repeat no chance, that [Congo’s] creditors will ever recover their loans." Congo’s foreign debt then stood at $5 billion. Nevertheless, in the 1980s, after Blumenthal left, the World Bank, IMF among other northern creditors lent Mobutu almost US$5 billion more. In this case however the international financial institutions (...)Lire la suite