Log In | Register
Abstract:
Fiscal deficits and mounting sovereign debt have become the preoccupation of most developed
economies, along with anxiety concerning currency devaluation. Operations of various kinds have been
performed by central banks and sovereign treasuries. However, this view of the current
situation continues to deal with symptomatic remnants rather than source causes. Our paper explores the
concept of the Full Faith and Credit of Sovereign Governments: a practical definition of what stands
behind a fiat currency.
Sovereign Nations have available within their borders, a plethora of resources coupled with the relative
skill and technology to access them. The ability to monetize those resources through coefficients of
human innovation and existing technologies, form the basis of a formula with which to view the value
potential inherent to sovereign balance sheets—which generally are representative of current assets only.
It’s not bankruptcy, which existentially confronts developed economies but cash flow shortfalls. New and
creative ways of monetizing assets for dealing with long term debt while increasing productivity would
sequentially lead to dealing with the problem of short term deficits. The monetizing of assets could
increase GDP, spur job creation and if done adroitly, control fluctuating cycles of deflation and inflation:
thus protecting the stability of a currency.
This paper discusses a program for dealing with the issues behind the Full Faith and Credit of Sovereign
Nations, National Balance Sheets, Debt and their consequent effects on Currency Valuation.
