<blockquote>'It's the government that has to tighten its belt.'
- Felipe Larrain, Chile's finance minister. [1]</blockquote>
'..the [US] would emerge from the process humbled but solvent..'<blockquote>'..the only approach would then be a sale of U.S. assets .. the greatest “quick hit” realization from creditor management would come in financial assets. According to their latest financial statements, there are $3.1 trillion in mortgage assets on Fannie Mae’s balance sheet and $2.1 trillion on Freddie Mac’s (these totals are sharply up over the past year, as both institutions have been buying mortgage debt to support the market.) .. the good quality paper could readily be sold back into the private market at only a modest discount, since “prime” mortgages are as they always have been an attractive banking asset. By realizing say $4 trillion from these sales (while retaining outstanding the long-term Fannie Mae and Freddie Mac debt, which would remain backed by the government guarantee) the liquidity position of the U.S. government would be revolutionized.'
- Martin Hutchinson,
Bringing Pain to State Bankruptcy, May 30, 2011</blockquote>
Note'In addition to raising interest rates, the Chilean government announced a $750-million reduction in public spending this year.'
- Chris Kraul,
In Latin America, prices are jumping, May 28, 2011