Austerity measures are typically taken if there is a perceived threat that government cannot honor its debt liabilities. Such a situation may arise if a government has borrowed in foreign currencies which they have no right to issue or they have been legally forbidden from issuing their own currency. In such a situation banks may lose trust in government's ability and/or willingness to pay and refuse to roll over existing debts or demand exorbitant interest rates. In such situations, inter-governmental institutions such as theInternational Monetary Fund (IMF) typically come in and demand austerity measures in exchange for functioning as a lender of last resort. When the IMF requires such a policy, the terms are known as 'IMF conditionalities'.
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Friday, June 17, 2011
A major Global Reset Button is pushed to set platform for next era.
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Major Turn Around in Global Economics
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. Increase demand of money
. Decreading supply of money
. Means Deflationary Enviroment.
. Means Cash is King.
. Debt induced growth cannot go on forever.
. Do the Governments know & have decided to tackle this head on ?
. Is that why it's preparing Global Mjor Repairs Works to counter balance
the deflationary environment ?
. To keep people employed
. Using the Cash that is currently in the system ?
. Is there a preparation for the great global funds reshuffle in progress ?
. Hedge Funds Taps are already installed on the Cash Reservoirs of China & Asia
. China already offered $1 trillion for US infrastructure investment.
. Private equity funds are organized for these events.
. Tech & Fashion companies cashing out. Groupon, LinkedIn, Facebook, Prada....
. Countries recruited to cushion the impact :
(Arabs countries, Africa, Indonesia, S.America)
. US companies expanding & strengthening overseas presence.
. What if US defaults ? What if no QEIII ?
. Is this why Banks worldwide are told to raise their capital reserves ratio ?
. This is going to be a Worldwide Coordinated Goverment efforts !
. Everyone must play ball.
. A major Global Reset Button is pushed to set platform for next era.
. What does it mean for US debt ?
. What does it mean for US $
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