[A-List] RE: Sabri's questions

[Hudsonmi at aol.com]

Henry says:   Domestically, a government borrows so that sovereign debt 
provides a benchmark for the domestic private debt market.  Governments need never 
borrow for lack of money.  Internationally, it's a different story. 
Governments borrow foreign currencies mostly to finance imports.

Michael here: Actually, Henry, my statistics of the balance of payments of 
third world countries that many governments (especially Russia in the 1990s) 
borrow (1) to finance capital flight, and (2) to pay interest and amortization on 
foreign debts, NOT on imports.
    And, the ENTIRE trade deficit typically is in food - as a result mainly 
of countries shifting away from grain and other domestic food production to 
plantation export crops. Most of this shift has been subsidized by World Bank 
loans and pressures from the IMF and AID.

Michael
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