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© Robert G Parker – UW-CISA 2010
Societal Trends and Issues
Economy
Sovereign Debt
S-1
Economic Dichotomy
2
Societal Trends and Issues
Economic Dichotomy Sovereign Debt
3
Societal Trends and Issues
Economic Dichotomy Sovereign Debt
4
Societal Trends and Issues
Economic Dichotomy Sovereign Debt
Canada - 2006 $569, 362$259,044
5
Societal Trends and Issues
Economic Dichotomy Canadian Debt
Canadian Federal Debt to GDP 45%
Ontario Debt $220 BillionQuebec Debt (Including Hydro) $218.5 Billion
Canada’s debts are at a Ratio of 90% of GDP
6
Societal Trends and IssuesCanadian & Other Sovereign Debt
US Federal Debt is 98.62% of GDP
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Societal Trends and IssuesCanadian & Other Sovereign Debt
Canadian Federal & Provincial Debt is Approximately 90% of GDP
US Federal Debt is 98.62% of GDP
States are Not Allowed to Budget a Deficit
Greece 143%Italy 119%
Ireland 96%Portugal 93%
Belgium 97%
Reuters Source: Eurostat, Bank For International Settlements
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Societal Trends and IssuesCanadian & Other Sovereign Debt
Difficulty in Obtaining Credible Information
U.S. National Debt Clock 2011-July 18, 2011
Societal Trends and Issues
Sovereign Debt
June 29, 2011 $14.46 Trillion
98.6% of Calendar Year 2010 GDP
USA GDP – 2009$14.1 Trillion
USA GDP – 2011$14.5 Trillion
11
Business Reaction
Recognise and understand that sovereign debt issues are a threatAssess the risks to each particular businessDevelop risk and threat mitigation plans
Sovereign Currency Risk Management
Employ hedges and currency swapsContract in a stable currencyLimit exposure period – short term contractsContract in kind – commoditiesObtain Accurate, Non-Conflicting Information