{"id":91,"date":"2005-10-20T20:21:38","date_gmt":"2005-10-21T00:21:38","guid":{"rendered":"http:\/\/blogs.law.harvard.edu\/globalfund\/2005\/10\/20\/shadows-of-foreign-debt\/"},"modified":"2005-10-20T20:21:38","modified_gmt":"2005-10-21T00:21:38","slug":"shadows-of-foreign-debt","status":"publish","type":"post","link":"https:\/\/archive.blogs.harvard.edu\/globalfund\/2005\/10\/20\/shadows-of-foreign-debt\/","title":{"rendered":"Shadows of Foreign Debt"},"content":{"rendered":"<p><a name='a131'><\/a><\/p>\n<p>By <span style=\"font-style: italic;\">Hans F. Sennholz<\/span><br \/>\nIn their foreign dealings many American businessmen are enjoying the<br \/>\npresent situation. Virtually all their international liabilities are<br \/>\ndenominated in U.S. dollars while some 70 percent of their foreign<br \/>\nassets are reckoned in foreign currencies. The value of foreign assets<br \/>\nand liabilities obviously changes with every change in the exchange<br \/>\nrates of the currencies. A fall of the U.S. dollar immediately trims<br \/>\nthe value of virtually all American liabilities while it raises the<br \/>\nvalue of American assets owned abroad; a rise of the dollar effects the<br \/>\nopposite. &#8230; The Federal government with rapidly rising debt of more<br \/>\nthan $8 trillion is by far the biggest beneficiary.<\/p>\n<p>American officials and their academic friends are quick to reject such<br \/>\nanalyses and conclusions. They dismiss all thought of responsibility<br \/>\nfor the situation and instead point to an acute savings predisposition<br \/>\non the part of creditor countries&#8230;<br \/>\n&#8230;<br \/>\nMany countries, rich and poor, now are supporting the richest country<br \/>\non earth. This odd situation raises serious questions of consequences<br \/>\nif the creditor countries should suddenly tire of their chore and call<br \/>\na halt to the burden. What would happen if, for instance, the Asian<br \/>\ncentral banks should suddenly refuse to add to their dollar holdings or<br \/>\neven reduce them and instead decide to invest their surpluses in euros?<br \/>\nSurely, such a reaction would lead to much international turbulence and<br \/>\nsevere economic crisis.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Hans F. Sennholz In their foreign dealings many American businessmen are enjoying the present situation. Virtually all their international liabilities are denominated in U.S. dollars while some 70 percent of their foreign assets are reckoned in foreign currencies. The value of foreign assets and liabilities obviously changes with every change in the exchange rates [&hellip;]<\/p>\n","protected":false},"author":359,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[783],"tags":[],"class_list":["post-91","post","type-post","status-publish","format-standard","hentry","category-international-development"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/archive.blogs.harvard.edu\/globalfund\/wp-json\/wp\/v2\/posts\/91","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/archive.blogs.harvard.edu\/globalfund\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/archive.blogs.harvard.edu\/globalfund\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/archive.blogs.harvard.edu\/globalfund\/wp-json\/wp\/v2\/users\/359"}],"replies":[{"embeddable":true,"href":"https:\/\/archive.blogs.harvard.edu\/globalfund\/wp-json\/wp\/v2\/comments?post=91"}],"version-history":[{"count":0,"href":"https:\/\/archive.blogs.harvard.edu\/globalfund\/wp-json\/wp\/v2\/posts\/91\/revisions"}],"wp:attachment":[{"href":"https:\/\/archive.blogs.harvard.edu\/globalfund\/wp-json\/wp\/v2\/media?parent=91"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/archive.blogs.harvard.edu\/globalfund\/wp-json\/wp\/v2\/categories?post=91"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/archive.blogs.harvard.edu\/globalfund\/wp-json\/wp\/v2\/tags?post=91"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}