The main reason for this is of course

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Re: The main reason for this is of course

Post  ptl161 on 4th May 2011, 13:35

Consider these figures, in US dollar terms, gathered from the BBC. The foreign debt of the government of Vietnam at the beginning of March 2011 was 29 billion, just over 42% of the annual gross domestic product. The country operates a twin deficit in trade and in government budget. Inferring from the figures below, however, it appears the government of Vietnam could go bankrupt. The government’s reserves, its savings, are less than 50% of debt. If all 29 billion of debt has to be repaid tomorrow, the government of Vietnam will not have enough money to pay all. If there were a call on loans by all creditors at the same time, the government’s finances would not be liquid. This may not happen, but the possibility exists, say, in a political crisis like Egypt 2011 or a severe national disaster like the Japan earthquake this month, or a sudden panic among foreign capital investors and lenders.

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