Sublime

this book I will argue that certain types of financial crises—like the crises that have affected many Latin American and Asian countries in recent years—are problems of sovereign balance sheet mismanagement and not economic mismanagement.

Lehman Brothers

The first is our best-case scenario, although for the reasons I have noted it is unlikely to describe conditions today, especially in capital-rich countries like the U.S. The second and third ways are unsustainable because they actually destroy value by increasing debt faster than they increase debt-servicing capacity.

With Chinese funding of European debt, Europe, ironically, would find itself enjoying part of the supposed benefits of exorbitant privilege. It would discover however that while more foreign funding sounds like a good thing, it is the same as larger current account deficits, which most certainly are not a good thing for countries struggling with lo