Viewing a response to: @musing-threads/n887fhoz0
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| author | marcusdo |
|---|---|
| permlink | fkkvl9985 |
| category | musing-threads |
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| created | 2018-10-21 12:16:06 |
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<a href="https://musing.io/q/marcusdo/fkkvl9985">View this answer on Musing.io</a>
| author | cryptoandcoffee |
|---|---|
| permlink | pk474el8x |
| category | musing-threads |
| json_metadata | "{"app":"Musing","appTags":["Finance"],"appCategory":"Finance","appTitle":"What usually causes financial problem in a country?","appBody":"<p>Corruption in the government normally causes financial issues in the country.</p>\n<p>We are experiencing this situation first hand right now. The last government were so crooked and corrupt that money gathered from taxes has been stolen and misspent.</p>\n<p>This has a knock on effect as it leaves no money for developing infrastructure and other projects. These things create work and spread the money back into society. Due to shortages now our income tax has had to be increased taking money out of the citizens pockets creating less wealth.</p>\n<p>VAT has been raised plus they have taken more loans from the International Monetary Fund which puts pressure on the value of the countries currency. The local currency has lost 20% in value against the dollar lately making imports more expensive.</p>\n<p>This effect includes the importing of crude oil which is the base for petrol and diesel. The knock on effect is felt by everyone as everything now goes up in price. The country is worse off until these things can be resolved.</p>\n<p><br></p>\n<p><br></p>","appDepth":2,"appParentPermlink":"fkkvl9985","appParentAuthor":"marcusdo","musingAppId":"aU2p3C3a8N","musingAppVersion":"1.1","musingPostType":"answer"}" |
| created | 2018-10-21 13:29:24 |
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<a href="https://musing.io/q/marcusdo/fkkvl9985">View this answer on Musing.io</a>
| author | horlaryhiwhorlar |
|---|---|
| permlink | pk9rue98x |
| category | musing-threads |
| json_metadata | "{"app":"Musing","appTags":["Finance"],"appCategory":"Finance","appTitle":"What usually causes financial problem in a country?","appBody":"<p>Hypothetically and ideally, governments pay their bills utilizing wage from expenses and speculation. In any case, similarly as how we as people frequently spend past our methods and turn to credit spending, an administration does it by issuing securities with the guarantee to pay back the estimation of the securities with financing cost at its development rate. National obligation, otherwise called sovereign obligation, comprises of interior and outside obligations. While interior obligations establish of obligations owed to those inside the nation, outer obligations allude to remote cash named bonds issued by the legislature and sold to outside financial specialists (Investopedia, 2017). While interior obligations can be financed through financial and money related arrangement by raising charges and printing more money, outside obligations may occupy finance from every single other piece of the income producing exercises as it should be paid utilizing remote cash, which government has no power over. </p><p>Default occurs because of a country's powerlessness or reluctance to reimburse its obligations. The last regularly happens when there is an adjustment in overseeing gathering of a country: new government would default on the obligation it acquired from its antecedent. There are additionally different reasons with respect to why a nation defaults on its obligation, for example, straightforward inversion of worldwide capital streams and feeble incomes. For example, Jamaica's default on its $7.9 billion credit in 2010 was because of its legislature overspending and the decay of its key area – tourism. </p><p>\"The nation goes bankrupt\". That is truth be told, a wrong explanation. Right off the bat, a nation does not go bankrupt but rather, defaulted on its credit when it neglects to reimburse its obligations. Furthermore, nation does not default, its administration does (Abascal, 2015). A country defaulting on its obligations may appear to be an uncommon case, yet most nations have defaulted or rebuilt their obligations in any event once in their history (The Economist, 2014). Greece was the principal nation to default on its obligation in 377BC, aside from its prestigious default of $1.8 billion just like the main created nation to ever default on IMF advance. Since its freedom in 1829, Greece has invested around half of its energy in defaulting its obligation (Bojesen, 2012). Spain, then again, has defaulted the most occasions: 15 times amid the eighteenth to nineteenth century. </p><p>Frequently, before defaulting on its advances, part nations of International Monetary Fund (IMF) may look for bailout safeguard from IMF, which give budgetary assets, as well as the specialized ability to deal with the bailout program (Amaro,2017). Be that as it may, these bailout subsidizing is never a free lunch, as it accompanies stringent conditions, for example, severity (cutting use), downgrading of cash and exchange progression, as set up in the Washington Consensus. </p><p>What Happens After a Country Defaults? </p><p>In case of individual or organization insolvency, the advantages are repossessed by the lenders. Amid a nation's default in any case, neither its benefits can be seized by its loan boss nor can the nation be compelled to pay with the cash it doesn't have. Nonetheless, there is no certification this applies to the nation's benefits abroad. This was the situation when Argentina's naval force preparing ship which was then in Ghana, was seized when Argentina defaulted in 2012. </p><p>The main plan of action for the lender of the defaulted nation is to renegotiate the terms of the credit. Government bonds will be rescheduled for conceded installment or experienced 'hair style', which includes diminishing the estimation of bonds. After its $81 billion default in 2011, Argentina offered to pay its banks 33% of what it owed. In this respects, 93% of the obligation was swapped for performing securities in 2005 and 2010, and not just until the point when 2016 that Argentina reimburse 85% of the rest of the obligation held by vulture finance for 75% of its unique esteem (Blitzer, 2016).</p>","appDepth":2,"appParentPermlink":"fkkvl9985","appParentAuthor":"marcusdo","musingAppId":"aU2p3C3a8N","musingAppVersion":"1.1","musingPostType":"answer"}" |
| created | 2018-10-21 13:02:54 |
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<a href="https://musing.io/q/marcusdo/fkkvl9985">View this answer on Musing.io</a>
| author | resuscitate |
|---|---|
| permlink | pkyfnel8x |
| category | musing-threads |
| json_metadata | "{"app":"Musing","appTags":["Finance"],"appCategory":"Finance","appTitle":"What usually causes financial problem in a country?","appBody":"<p> Two major causes of financial problem in a country are poor planning and poor economic policies. A government's economic policies can either bring in investors into a country or drive away investors. If a country's economic policies are good and encourage investing, investors will troop into such country to invest in their economy and this will in turn create jobs and put more money in circulation. The reverse is the case if a country's economic policies don't encourage investors </p><p>Also, most countries fail to plan for the future when they had financial boom. They didn't build infrastructures and put establishments in place when the country was prospering. Such countries usually suffer a lot during financial crisis. Governments are supposed to create other means of generating revenues aside collection of taxes. And these other means of revenue generation can best be planned and implemented during financial booms. But when they fail to do that, the country is likely to experience financial problems in the future.</p><p>Poor leadership, lack of economic insights, corruption, poor economic policies that don't attract investors etc are some common causes of financial problems in a country </p>","appDepth":2,"appParentPermlink":"fkkvl9985","appParentAuthor":"marcusdo","musingAppId":"aU2p3C3a8N","musingAppVersion":"1.1","musingPostType":"answer"}" |
| created | 2018-10-21 13:32:45 |
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