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Politics : The Obama - Clinton Disaster -- Ignore unavailable to you. Want to Upgrade?

To: Wayners who wrote (25736)	2/5/2010 9:29:44 PM
From: DuckTapeSunroof	Read Replies (1) \| Respond to of 103300

Re: "The world’s largest money management firm, PIMCO, explains the rule this way: “The minimum benchmark of reserves equal to at least 100% of short-term external debt is known as the Greenspan-Guidotti rule. Greenspan-Guidotti is perhaps the single concept of reserve adequacy that has the most adherents and empirical support.” The principle behind the rule is simple. If you can’t pay off all of your foreign debts in the next 12 months, you’re a terrible credit risk. Speculators are going to target your bonds and your currency, making it impossible to refinance your debts. A default is assured.... So how does America rank on the Greenspan-Guidotti scale? It’s a guaranteed default." Then, no... I don't believe that 'rule' applies with much effect to the United States of America. The short-term vs. long-term ratio is of much less importance to us (as the global default currency for world trade) then the total debt (public + private, measured as a percent of GNP) is for us. For a lesser nation, not important as standard medium of exchange in global trade, (Greece, Ireland, Romania, etc., etc.) then the short-term vs. long-term ratio likely accounts for more of their risk though.