Government Debt: Default Projections

International dialogue continues with OTC derivatives in the spotlight, as the scope of the debt crisis in the European Union becomes more transparent. [2] According to the Wall Street Journal, Italy now projects damage that will impact municipalities for the next 20-30 years [3]. Economic damage to the US States/Municipalities and 192 United Nations countries is viewed as incomprehensible.  

Though Greece has been thrust into the international spotlight, you will note in the following CNBC  slideshow  ”Government Debt Issuers Most Likely to Default” [1] that the country ranks #10 on the crisis list:

1. Venezuela, 2. Ukraine, 3. Argentina, 4. Pakistan, 5. Latvia, 6. Dubai, 7. Iceland, 8. Lithuania, 9. California, 10. Greece.  

The intensification of the current economic emergency, impacting every United Nations member country, has prompted a review of the 2003 paper “IMF: Universal Bankruptcy Law for Sovereign Debtors.” [4]  This IMF focus was most probably a direct result of research that projected a serious international debt crisis associated with OTC derivatives (Randall Dodd, Warren Buffet). [5,6]  All of these challenges are a direct result of the 1999 repeal of Glass-Steagall and deregulation of OTC derivatives. [7]  

Emergency economic stabilization initiatives are needed for containment, restructure and debt relief proportional to the damage caused by these so-called economic “Weapons of Mass Destruction.” [6]

Two years into this crisis on the grassroots level in the United States, I am continuing to advance economic emergency assistance initiatives at a post-Katrina touchdown level [8], that will extend for the duration of this downturn.  Similar efforts are needed in every UN member country.

Looking forward to coordinated action,

Stephen Michael Apatow
Founder, Director of Research and Development
Humanitarian Resource Institute
Phone: (203) 668-0282
Url: www.humanitarian.net
Email: s.m.apatow@humanitarian.net

United Nations Arts Initiative
Arts Integration Into Education
Url:  www.unarts.org
Twitter: unarts

References:

1. Government Debt Issuers Most Likely to Default: CNBC. Url: www.cnbc.com/id/34465366/
2. CNBC Greek Ex-Minister: Other Euro Countries (Italy, France and Spain) Did Swaps Too: CNBC. Url: www.cnbc.com/id/35438321
3. Derivative contracts taken out by Italian municipalities could jeopardize local public finances for 20-30 yrs. Wall Street Journal. Url: http://online.wsj.com/article/SB10001424052748703444804575071352329954616.html
4. IMF: Universal Bankruptcy Law for Sovereign Debtors: CATO Institute. Url: www.cato.org/pubs/fpbriefs/fpb75.pdf
5. Special Policy reports: Global Policy Forum: Derivatives Study Center. Url: www.financialpolicy.org/dscreports.htm 
6.  Warren Buffet on Derivatives:  Excerpts from the Berkshire Hathaway annual report for 2002.  Url: www.fintools.com/docs/Warren%20Buffet%20on%20Derivatives.pdf
7. The Warning,: PBS Special on CTFC Chair Brooksley Borne. Url: www.pbs.org/wgbh/pages/frontline/warning
8. U.S. Needs Analysis Critical for Strategic Planning and Relief: Humanitarian Resource Institute: United Nations Arts Initiative. Url: www.unarts.org/news/aunappeal_182010.html