Is devaluation a now a given?
by West Side Davie
There comes a time during a bankruptcy when the debtor stops caring. The debtor realises that there is nothing more they can do and it’s all about the ride and having a place to sleep and a meal or two a day. I’ve been there myself, and although I don’t care to go into the personal details I can assure you that your skin gets thick and tough and very quickly you get a new attitude that allows you to survive and even thrive as your finances and everything you have crumbles. Mostly your woman leaves. No money, no honey!
With assets of $20,000 and debts of $100,000, it doesn’t really matter if the debts climb to $200,000 or $300,000…. I can’t pay it! You think, “Let it go sky high! Why should I care?”
Unless the debts were passed onto your children like the indentured slaves and sharecroppers of the past – or of the present in some countries.
Back to Bim… Barbados has a few more assets than I did, but the people in charge of the money are going to squeeze us for more interest. They do this by lowering the ratings. The lean years are here and our so-called leaders never put away a dollar during the times of plenty.
IN CONTRAST to the prevailing mood of confidence over the economic future of Trinidad and Tobago, there is spreading depression across in Barbados where thousands of public sector workers are facing retrenchment early next year as the government anxiously seeks to avoid a devaluation of the Barbados dollar.
Here in Trinidad and Tobago, while Prime Minister Kamla Persad-Bissessar was last week playing a “Santa Claus” role with her offer of a 20 per cent rebate over the past two days on a range of widely consumed basic commodities, the Guyana the government of President Donald Ramotar found much comfort in another consecutive year of economic growth.
Having concluded an arrangement with the IMF that included, for a start, the bitter medicine of some 3,000 job cuts in the public sector, or face the threat of devaluation of the Barbados dollar, the Democratic Labour Party administration of Prime Minister Freundel Stuart has Barbadians in a mood of spreading gloom.
Accustomed to applause from international financial institutions and credit rating agencies as having the most stable currency in this region-50 cents to the US dollar-the prospect of having to cope with a devalued dollar is viewed by Barbadians as sacrilegious talk.
… from the Trinidad Express Spectre of devaluation
Bajans are well and truly screwed. And so are the next generations because we keep mortgaging the future for our children.
The answer from our leaders is never to stop borrowing and to make do. It never is that. Always the answer is to pay whatever is asked in interest and go to the money men.
Tell you what I’m going to do. I’m going to get a little squat, work hard and save. I’m not going to continue to borrow money. I’m going to reorganise my life, downsize, and work hard.
But I’m not going to borrow more money if that borrowing is on the heads of my children…
Another downgrade for Barbados
Moody’s Investors Service on has downgraded Barbados’ government bond rating to Ba3 from Ba1, putting the country’s rating deeper into junk territory.
It cited the country’s “continued anemic economic performance”; ongoing deterioration in the government’s financial strength, due to persistently large fiscal deficits and rising debt levels; the deterioration in the government’s debt profile as a result of the significant increase in domestic short-term borrowings over the past two years; and the fall in foreign exchange reserves by more than 30 percent during January-September to $505 million for its two-notch downgrade.
Moody’s also said the country’s credit outlook remained negative.
“The continued negative outlook on Barbados’s rating primarily incorporates Moody’s expectation that the government’s debt metrics are likely to continue to deteriorate. Additional factors driving the negative outlook are the rating agency’s expectation that (1) Barbados’s growth prospects will likely remain subdued; (2) the recently announced fiscal consolidation plan is unlikely to reverse current trends in government debt indicators; (3) the government is likely to face increasing financing costs; and (4) pressure on the exchange rate peg will continue to increase,” it said in a statement issued a short while ago.
… continue to read this article at Barbados Today Another downgrade for Barbados