COSTS AND BENEFITS OF NFD

[hdxx]

Hi, what are the costs and the benefits of NFD?

[Chelsea f.c.]

it would help if you wrote the words rather than the acronym - is it net financial debt??? we can refer to government debt, company debt or personal debt but all in all one goes into debt when they need finances to fund an acquistion or project without having enough funds themselves... debt is a contract with rights for one side and obligations for the other (i.e. payment of funds specifying when and how much and recourse if funds are not repaid)... what are the positives of debt??? If i can create more money from the project or acquisition than i have to repay (i.e. a house (oppurtunity cost is rent plus more materially appreciation), a mine, or a power plant) then i will be better off... the negatives??? i have to repay! e.g. if a company fails to make a payment the counterparty has recourse to act maybe even force bankruptcy...

net means aggregate assuming some people/companies/government in the country own debt and others pay debt... Australia relies on outside financing for its economy so continually pays money overseas which is captured in current accounts...

your question needs to be more specific though (rather than one line) as i'm not an economics dictionary... hope that helps

[S200]

I think NFD is Net Foreign debt...

Which you kinda mentioned with this part...

net means aggregate assuming some people/companies/government in the country own debt and others pay debt... Australia relies on outside financing for its economy so continually pays money overseas which is captured in current accounts...

[Chelsea f.c.]

thanks for clarification =) basically we take on debt to finance value creating projects but the downside is if you can't pay the other party has recourse...

i don't know what happens when a government defaults (as they literally print money) but good luck getting another loan... which is bad as the government that defaults probably needs the money

[S200]

thanks for clarification =) basically we take on debt to finance value creating projects but the downside is if you can't pay the other party has recourse...

i don't know what happens when a government defaults (as they literally print money) but good luck getting another loan... which is bad as the government that defaults probably needs the money

Check Greece for an example. We would have seen what happened on default had not the EU stood in for them...