GEOG 122 Lecture Notes - Lecture 7: Floating Exchange Rate, Eurodollar, Debt Relief
Document Summary
7: the map of global debt in the 1980s. Global interdependence: geographical, sectoral, economic, political & social conditions, the map of developing world debt. Northern debt: canada and especially u. s. where 2017 debt alone = trillion in 2017: china holds > trillion of u. s. debt. Evolution of developing world debt: took off during 1970s. billion in 1989: causes of debt: background. Unravelling of bretton woods post-war economic order: floating currency exchange rates 1971. Creatio(cid:374) of u(cid:374)regulated (cid:858)eurodollar(cid:859) (cid:373)arket: huge intake of petrodollars after 1973 and 1979 oil shocks. Question for eurodollar bankers: where to invest it: answer: emerging economies with growing markets (i. e. brazil) and important resources (i. e. oil: mexico, nigeria) Post-1973 recession in west: limited demand there, causes of debt: immediate. Rising dollar and interest rates raise repayment cost. Unwise lending practices by banks: corruption in some developing world governments, consequences.
