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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: GraceZ who wrote (25732)12/8/2004 9:27:18 PM
From: SpekulatiusRead Replies (1) of 306849
 
re Debt implosions -
I don't know if this applies to Argentina, but in many developing countries have many restrictions on what foreign investors can buy. Even now, Foreigners in Thailand and many other countries cannot own land or and there are restrictions to ownership to national companies as well. So if a country borrows from foreign debtors and a crisis were to develop, foreign debtholders are restricted from converting their debt into ownership of many assets, which could stop the death spiral. This is a very different situation from the US, where very few restrictions exist for foreign investors. If ever a death spiral would start to develop, I think foreigns would scoop up US assets in exchange for their debt. I believe for this reason, if nothing else,a death spiral with foreign debt is much more unlikely if it is going to happen, it will not be as severe as with many developing countries.
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