What's the real reason that Taiwan has no foreign debts? isn't this actually a dangerous thing?

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Re: What's the real reason that Taiwan has no foreign debts? isn't this actually a dangerous thing?

Postby FurTrader » 31 May 2012, 11:42

headhonchoII wrote:

What they mean by 'no foreign debts' is that it has no outstanding debts to the World Bank and IMF. Taiwan is not a member of the UN and is not able to borrow from these organisations anyway.


if Taiwan ever needs outside financial help, where will it get it from? (not China, I hope?)
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Re: What's the real reason that Taiwan has no foreign debts? isn't this actually a dangerous thing?

Postby headhonchoII » 31 May 2012, 11:50

The first thing Taiwan could do is turn to it's own pool of wealthy citizens. They could also increase tax.

If they needed to turn to another sovereign China would be a definite candidate. Japan and the US would probably have an interest in supporting Taiwan's fiscal health.

But Taiwan is in great shape compared to most countries, it's not a REAL problem here compared to many other issues.
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Re: What's the real reason that Taiwan has no foreign debts? isn't this actually a dangerous thing?

Postby FurTrader » 31 May 2012, 13:08

headhonchoII wrote:The first thing Taiwan could do is turn to it's own pool of wealthy citizens. They could also increase tax.

If they needed to turn to another sovereign China would be a definite candidate. Japan and the US would probably have an interest in supporting Taiwan's fiscal health.

But Taiwan is in great shape compared to most countries, it's not a REAL problem here compared to many other issues.



..... so [Taiwan] is like a woman with a Virginia ham under her arm, crying the blues 'cause she has no bread....??? :D
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Re: What's the real reason that Taiwan has no foreign debts? isn't this actually a dangerous thing?

Postby headhonchoII » 31 May 2012, 13:13

:bow: :lick:
I can remember the fourth of July runnin' through the backwood bare.
And I can still hear my old hound dog barkin' chasin' down a hoodoo there
Chasin' down a hoodoo there.
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Re: What's the real reason that Taiwan has no foreign debts? isn't this actually a dangerous thing?

Postby tommy525 » 03 Jun 2012, 12:46

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What's the real reason that Taiwan has no foreign debts? isn't this actually a dangerous thing?

Postby headhonchoII » 03 Jun 2012, 15:15

It is important to understand how much debt is owed internally to the central government, at the same time that kind of debt is easier to play with than sovereign debt, at least until the shit hits the fan like in Spain. Taiwan has it's own currency which gives more options than Eurozone countries.

It's really a poor comparison to make though, saying Taiwan could be like Greece, nah.

One interesting thing about debt is that countries can go broke overnight if private debt becomes public debt. Ireland went from something like 60% debt to GDP to 150% debt to GDP in the space of a few years.
This is due to the socializing of banks private debt, something that Taiwanese would just not agree with and quite rightly so!
Plus Taiwanese banks are in better shape in general even if they may be affected by a downturn in real estate, they don't do sublime type loans.
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And I can still hear my old hound dog barkin' chasin' down a hoodoo there
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