Gamesmith94134: The moral Economy of investment in A fair Hearing for sovereign Debt.

I would have agree on the UN resolution of the sovereign Debts and investment that we need another political platform in reviewing the Sovereign debt and investment, so is the exchange rate that has become a factor in destabilization of an economy. In the recent Venezuelan case study, the disputes of destabilization act through the black market that US became the culprit of the evil act. I would congratulate Mr. Maduro in thwarting the coup as claimed; and it was not a jolt like Arab Spring or Orange revolution that topples the regime. It was a relief that diplomatic resolution can calm it down by cutting workers in the embassy.

When I learned the Bolivars rose 170 to a dollar and the ruble went 62 to a dollar, I was amazed that socialistic economy used the different exchanges rates in complying to the international currency exchange like subsidiaries applying to the daily need supplies; and I see how the inflation went sky high like 67%. I am not protecting either sides of the government or the corporate turn their faces whenever default happens. At first, I question if we really invested at much of 50% in Venezuela and Russia that made its asset currency outflow that bad.

Perhaps, I am looking into US that the DJ and Nasdaq stock went 18,000 and 5,000 respectively; I really get serious about the liquidity trap that the international currency community took dollar to the brink; and the housing and retail are slowing down or just the beginning to depreciate in currency or equity that may cause the banks to default again. This time is about $200 trillion; and I am getting worry on the throw weight system in the exchange.

In a way, the current debacles of the BRICS are forced to stabilize their currencies by investing in the Developed nations. Perhaps, the development peaked now for the advanced low interest rate lending from BRICS; it has showed the bubble in the equity market and the conflict of interest in the FED in an alarming way that inversion seemed inevitable under the monetary politics as in currency war. It is time to restore the sovereignty securities like it used to in restoring its currencies and investments. I am not predicting the following defaults in EU or breaking down of the monetary union; but we must come to term that money is another commodity that deserves a second look in the World Trade Organization. In a way, we can preserve the sovereignty right on bonds that the linkage to the currencies can be regulated under the current floating rate system; because it is how the down draft that eroded the local currencies by 3-10 percent like rupees, rubles and so on in a year; and it dislocated the securities from circuitry normalcy; and it is how inflation grew within under the floating rate system; In reaction to the microeconomic sense, it creates the credit crunch; and comes following as the inevitable “beggar thy neighbor” through the contrast of the solvency on its debt or based on the strength of the reserves. It all end tragically.



Finally, I must agree with United Nations’ establishment of SDRMs that sovereign debt must be preserve in a way that the investment must be treated like commodity that a similar Sherman Act should be proposed. I have suggested the homestead law on the entry of foreign investment like cash funds; that 1% at lest 0.5% of $100,000 a day in entering in the transcontinental transfers; and these homestead tax can remand the loss when outflow caused credit crunch and depreciation of the local currency that such fund can be the FDIC of the international currency exchange.



In retrospect, these investors did not trade sovereign securities only; and they bought off the basis on sovereign currency as well. In some cases, inundation of foreign investment that prompts up the cost of living through the leverage of another class of equity security could cause devastative cycle of stagflation and depreciation; they often gives suppression the local economy in falling off to recession.



It may not stop these vulture funds; but the accumulated 1% can compensate or help the local trade groups like OAS, OCED, AU, ASAEN, North America or even Eurasian Economic Commission; if the worse arises. Moreover, why should those buy the discounted bonds if you ask? Why there isn’t a law allows the regional trade groups to reconcile in use of those homestead funds to buy back or refinance the bonds? Perhaps, the collateral in the collected Homestead fund can raise sufficient fund on the sovereign bond and attracts more private fund to participate in purchasing the 144 bonds that is guaranteed by the trade groups or World Bank in local currency or its choice.



Perhaps, I just make it too simple in finance as a security by profession; but I think the trade groups, WTO, IMF and the World Bank should look at the proposal as a draft to the international financial system and create the platform as needed.



May the Buddha bless you?

