IMF´s ridiculous working paper – How the ¨debt¨ will be reduced?

We picked the link to this report up via Twitter from Robin Fransman @RF_HFC

Adj-dir. Holland Financial Centre, Groene Inv. Bank. financiering economie, politieke economie, pensioenen, tweet op persoonlijke titel, retweet not endorsement. Amsterdam · hollandfinancialcentre.com

Until today he has not replied to any of our vital questions other than confirming that our money cannot be a store of value. No further justification, just an outright confession of the motive.

French Economy Minister Christine Lagarde speaks during a news conference in Riyadh

IMF Working Paper

According to this IMF working paper http://www.imf.org/external/pubs/ft/wp/2013/wp13266.pdf there are essentially five ways to reduce large debt-to-GDP ratios. Most historical episodes have involved some combination of these.

 

The Elements of Debt Reduction

1. Economic growth

2. Fiscal adjustment-austerity

3. Explicit (de jure) default or restructuring

4. Inflation surprise

5. A steady dose of financial repression accompanied by a steady dose of inflation.

 

Factual conclusion

A genuine fact of the first is impossible in a time of terminal debt. There’s no math which can make the ends of the second meet. The third is hapless, when only solution can save us or sustain real prosperity. The fourth is a worthless use of an inept term. The fifth must be shining up from the bottom of a glass of tequila. Together, they can be found at the bottom of any toilet for a moment — before they’re rushed off to where they belong.

http://www.imf.org/external/pubs/ft/wp/2013/wp13266.pdf

Geef een reactie

Vul je gegevens in of klik op een icoon om in te loggen.

WordPress.com logo

Je reageert onder je WordPress.com account. Log uit / Bijwerken )

Twitter-afbeelding

Je reageert onder je Twitter account. Log uit / Bijwerken )

Facebook foto

Je reageert onder je Facebook account. Log uit / Bijwerken )

Google+ photo

Je reageert onder je Google+ account. Log uit / Bijwerken )

Verbinden met %s