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Why World Leaders Should Choose a Working Capital Loan
It would be disastrous for the global economy if Greece defaulted and left the Euro zone. This is because so many countries have holdings of Greek debt. Banks would become very vulnerable and creditors would be afraid to lend. Exports would plummet and unemployment would rocket; inflation would soar.
Worse, the American markets have begun to panic when the word Europe is mentioned. Morgan Stanley showed numbers in the red despite their having strong collateral in deriviatives. But soon American banks will be under pressure to stop lending to Europeans. In order for things not to get worse, European politicians must realize that a working capital loan for Greece and many of the other bordering-on-insolvent countries must be enacted before it is too late and the panic becomes a pandemic.
Unsecured working capital is a better idea than the austerity plans being pitched about by leaders in Europe and in the Republican party. Not enough thought is being given to the medium term, instead, worries about the long term impact the slow decision making in the short. The result is a veritable quagmire, in which brinkmanship in the United States and inaction in Europe threaten to bring the entire world into a double dip. Let’s hope they bring on the working capital loan sooner rather than later.
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Posted on: Tuesday, October 4th, 2011 at 11:55 am
Posted in: Financial Solutions, working capital loan
Tags: Unsecured Working Capital, working capital loan