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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: the navigator who wrote (2758)	11/30/2007 6:50:22 PM
From: The Wharf	Respond to of 71463

My apologies, I do not understand this comment. Can you please elaborate? I would like to know why you think that old debt is harder to service than new debt. Isn't debt a promise to pay? And why would it matter when the promise was made? The best I can explain it amounts to if you go BK solution can be pennies on the dollar given to your creditors. The settlement for pennies on the dollar is the reason you can in some cases go back to being a viable business. Debt can be handled. The old debt is what cannot be paid where the new debt is manageable. If you look at the retailers here in the US consolidation of such was partially caused by debt base of the operations being too high. So the result was no other choice but to be bought out or merge. Or perhaps i could use people who are over their heads in credit card debt as an example. It is not the new purchase they make, that is the problem, it is paying for all the debt they have acquired that harms them. The balance of the debt becomes to heavy to pay off. Asia new companies have new debt and new promise of a future. They can gear to growth, although there is never a sure success the debt they carry is less. Chery can compete as her product is new and she is not carrying all yesterdays errors. Labor costs certainly help but the burden of old debt is one of the main factors. Product costs do not have to cover yesterdays obligations so they are very competitive price wise. You also benefit from yesterdays R&D. Mature economies with huge debt have a large problem. A gov cannot go BK so the preference is for inflation.