Jack, are those international bankers lunatic? An irresponsible kid gets indigestion on too many candies, so they offer him a plate full of twice as many candies. Who came up with this crazy policy, the irresponsible borrower got over his head, don't let his creditor access to his money. The result of such a policy will be complete drying out of international lending to less than perfect borrowers. This will plunge the far east into a 10 years depression. With such new rules, who would want to lend any money to an Indonesian or a Korean manufacturer? For that matter to any country in Africa where political upheavals could result in short term economic dislocations, or even to any country involved in a possible future conflict (Bosnia, Israel and its neighbors, Pakistan/India and I am not even going to name all these new countries just emerging from the Soviet block realignment).
Another lunatic idea in the same "float" from the G8 is those bonds with a re-negotiation clause. Gosh, I was under the impression that bonds of sovereign countries are "almost" holy. That opens the door for our own 5 trillions in debt to be re-negotiated. How about the same interest rate that Japan is paying on its bonds? Let me see, 4% of 5 trillion, that will reduce our budget deficit by another $200 Billion, or in about 15 years we can have all our national debt paid. I am for re-negotiation (who would buy these renegotiable bonds? What interest premium will these countries have to pay? 15%).
Zeev |
