Thursday, August 23, 2012

DEFAULT OR DEBT RELIEF DEBATE IN BELIZE

PRIME MINISTER BARROW OF BELIZE HAS REITERATED AGAIN AND AGAIN.  THERE WILL BE NO FINANCING OF THE DEBT BY THE IMF.

  First thing with the IMF would be a DEVALUATION.  Since Belize is a basic agriculture commodity producer, there would be no advantage to a devaluation.  It only works with industrialized manufacturing countries, making their exports cheaper to compete in the world market.  We have NO MANUFACTURING to gain any such advantage.

  Besides which it is time to call in the chips, in this POKER GAME.  When PREDATORY LENDERS LOAN to Belize, they are supposed to do their homework.  Due diligence.  Belize could NEVER pay the end result of this government and predatory lender combination PONZI SCHEME, in which loans were advanced to pay existing loans and interest.   That's the same as taking out more Credit Cards to pay off earlier credit cards.  It is not self sustainable.  TIME for predatory lenders to bite the bullet and write their gamble off.

  Long term this cannot work for Belize, unless the Government passes a LAW firing ALL politicians running the government if the new debt exceeds 3% of GDP in the past four quarters.  Calling for new by-elections for new players within Belize to replace them.  Of themselves, politicians cannot control spending.  Too many voter demands for MORE and MORE and MORE.   Name of the game.  You have to have laws, penalties and consequences to make controls on spending work. No such controls as above, the exercise will fail down the line again.

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