WHY DO MOST LARGE CORPORATIONS HAVE WEAK DEBT SERVICING CAPACITY
The Asia Crisis countries avoided deflation by devaluing their currencies and exporting deflation abroad. For example, the devaluation of the South Korean Won after the Asia Crisis contributed to the downward pressure on global semiconductor and steel prices. If the surplus nations can not invest into dollar denominated assets the must convert their dollar surplus into their own currencies and the conversion would cause their currencies to appreciate and slow exports and increase imports and cause their economies to recede and depress and recycle the world dollar surpluses. In light of the weak financial condition of many of the largest businesses, very few corporations will have the debt-servicing capacity to issue large amounts of new debt. Only the U.S government will have the debt-servicing capacity to issue large amounts of new debt.[Learn More ...]
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