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Planet Money did a great episode on Argentina, which decided at some point to default on its debt. http://www.npr.org/sections/money/2016/03/11/470136949/episo
by xal 10y ago
Planet Money did a great episode on Argentina, which decided at some point to default on its debt.
http://www.npr.org/sections/money/2016/03/11/470136949/episode-689-a-hedge-fund-a-country-and-a-big-sailboat http://www.npr.org/sections/money/2016/03/11/470136949/episo...
- alecco 10y agoArgentina didn't decide. It couldn't pay the interests anymore. It was a snowball of crazy high interest rates in a foreign currency. You can't pay your debt if it's much higher than GDP growth even with a surplus. And Argentina had neither growth nor surplus, thanks to the idiotic IMF economic plans with a currency pegged to the US dollar. A better point might be, why were they lent money in the first place?!?
- Mindcraft 10y agoAnd to a de-facto government.
- lambertsimnel 10y agoDebt to GDP ratios can also be described in terms of how long it takes to produce GDP equal to the debt. Owing 100% of GDP is owing one year's product. Whether that's a significant dividing line depends on rates of interest and growth.