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It argues that "ongoing budget deficits may become incompatible with Australia's high level of external indebtedness and therefore inconsistent with a 'AAA' rating".
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THE United States has managed to thrive despite high budget deficits and a staggering level of international indebtedness.
That figure compares favorably with the external indebtedness of other countries at a similar stage of development, such as Mexico and Turkey.
On Wednesday, S.& P. estimated the external indebtedness of Ireland's domestic banks at more than 170 percent of gross domestic product.
"The high level of household indebtedness constrains the pace of economic recovery", the IMF said.
Clearly there were other factors at work besides the composition of bondholders or the level of public indebtedness.
[A1.] Fed Officials Play Down Debt Risk Alan Greenspan and another top Federal Reserve official argued that the United States' record level of foreign indebtedness is unlikely to pose a major risk to the nation.
Chapter 13 bankruptcies allow debtors to retain their property and work out a repayment plan based on their income and the level of their indebtedness.
Lenders and debtors shared a common understanding: In spite of strained debtor-country budgets, all renegotiated external indebtedness would be treated equally in priority of payment.
These include a large stock of currency reserves, which its central bank built up during the good years; a flexible currency, which can act as a shock absorber; and a relatively low level of indebtedness to the outside world.
Starting in the 1970s, the benefits of a more open trade policy were superseded by the perils of real exchange rate appreciation, in a context where external indebtedness served to compensate in the short run for the distributional effects of trade openness.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com