Debts
in sentence
1153 examples of Debts in a sentence
There is a further reason why deflation is such a threat, and why policymakers setting out to eliminate it have a much tougher task than inflation fighters: all prices do not move down; in particular
debts
do not adjust because they are fixed in nominal terms.
Inflation and deflation of
debts
produce very different outcomes.
It is no longer possible to deny that public and/or private
debts
in Greece, Ireland, and Portugal will need to be restructured.
All of these economies were already growing anemically and below trend, as the ongoing process of deleveraging required a slowdown of public and private spending in order to increase saving rates and reduce
debts.
Currency devaluation was not an easy option, either, as it would boost inflation and send the costs of servicing external
debts
soaring to prohibitively high levels.
Worse, the ECB has made an ambiguous promise to share losses with private creditors if a distressed sovereign does not eventually repay its
debts.
So long as the bad
debts
claim center stage, collapse of domestic finance and of a nation's currency becomes extreme.
But if it is too difficult to restructure and reduce
debts
when bad luck leads to unsustainable debts, the result is bad for both the debtor and its creditors, who are better off when a reduced debt ratio is serviced than when a debtor defaults.
If no one knows what will happen if a country does not behave, the expectation may turn out to be that
debts
will be monetized – at a high inflationary cost.
But it does not follow that, as Corbynistas believe, large budget deficits and
debts
are harmless.
On the contrary, when
debts
become unsustainable and governments have no option but to close hospitals and slash pensions, it is the poor and vulnerable who suffer most.
The interest rate that Chinese banks charge one another for short-term loans had begun rising two weeks earlier on rumors that two medium-size banks had defaulted on their
debts.
Technically, successful financial deleveraging means restructuring their
debts
and forcing some of them into bankruptcy.
For example, lending small amounts of money or writing off
debts
to help the extreme poor are intended to help the most vulnerable, and both approaches seem entirely sensible.
By keeping bidding on BRI projects closed and opaque, China often massively inflates their value, leaving countries struggling to repay their
debts.
Sri Lanka’s experience was a wake-up call for other countries with outsize
debts
to China.
The IMF and the U.S. Government could play a useful role in helping the international banks to coordinate a rollover of
debts.
White argues that demand stimulus can impede deleveraging (presumably because ultra-low interest rates create an incentive for banks to forebear and roll over debts, rather than to restructure them and write them off).
To overcome this fundamental design flaw, government
debts
must be pooled.
Indeed, given stronger economies’ unwillingness to be exploited in this way, the risk of moral hazard is the most significant obstacle to pooling
debts
in the eurozone.
A debt-pooling scheme must also address the fact that the strongest countries will inevitably face higher interest rates on their own
debts
when they become jointly liable for the
debts
of less credit-worthy governments.
In fact, Alexander Hamilton adopted this approach more than 200 years ago, when he decided to mutualize the
debts
that individual US states had incurred during the Revolutionary War – a decisive move toward further political integration.
Now Iceland’s banks, having borrowed several times the national GDP, are in desperate trouble, with
debts
far beyond what the small country’s taxpayers can absorb.
China has over $130 billion in outstanding foreign debts, equal to about 12% of GDP at today's exchange rate.
We are constantly reassured that governments will not default on their
debts.
Put simply, in deflationary economies, where people and the state bear significant debts, only increases in money (as opposed to real) income are cause for celebration.
Indeed, much of the European periphery is caught in a deflationary mire, with money incomes falling,
debts
skyrocketing (as a share of money incomes), and banks drowning in non-performing loans that prevent them from lending even to profitable enterprises.
But what happened during the Iraq war demonstrated that no real practical goal--such as securing repayment of Iraq's
debts
or preserving Russian interests in Iraqi oil--guided Russia's foreign policy.
In particular, the temptation for governments to use inflation to reduce the real value of public and private
debts
may become overwhelming.
Spain and Portugal, by contrast, would probably suffer, owing to their still-considerable external
debts.
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