Sri Lanka Default and Complete Collapse

The recent complete collapse of Sri Lanka’s economy was a direct result of their default on their debt back in May.

Ironically (or NOT) this is the first time in Sri Lanka’s history that they’ve defaulted on their debt.

And it’s also the first default by an Asia-Pacific nation in this century.

Read: https://www.financialsmatter.com/another-under-the-radar-default/  May 23, 2022.

In the post (above) we said Sri Lanka’s default was “An economic and political crisis triggered by global shock waves from the pandemic and the war in Ukraine.”

We also noted that Sri Lanka’s default should serve notice to the rest of the world – especially Asian markets – how vulnerable they are to any rise in the US Dollar.

So here we are, less than two months, later seeing videos of protesters storming (the extremely corrupt) President Gotabaya Rajapaksa’s palace forcing him to flee.

This only confirms what we’ve been saying for a long time.

And it comes down to one simple fact.

When the people are hungry, no number of rules and restrictions will prevent them from protesting.

In addition to running out of food and fuel to cook with, the country’s foreign reserves were depleted.

As a result, the government began to cut the power grids daily.

(Sounding familiar?)

Complete Collapse and Then Some…

And because there wasn’t enough fuel to power the generators the government increased the duration of the blackouts.

Ironically (or NOT) not having enough fuel is similar to having a presidential order to cancel oil pipelines.

Oooops!

Maybe Sri Lanka is a one-off event.

Or Maybe this is one more piece of the global puzzle adding to the eventual Sovereign Debt Crisis felt by everyone.

Or Maybe JUST MAYBE, the Sri Lankans have figured out who is really to blame for their economy collapsing (Cough! Central Banks, Cough! Cough!)  and are setting the tone for what we’ll soon see around the world.

Any way you want to shake it, with 43% inflation and food costs rising 58% in May, Sri Lanka’s revolutionary wave has only just begun.

The bottom line???

This is NOT an isolated incident.

And as living standards decline, unrest will continue to rise.

Learn how to insulate yourself from the inevitable social unrest – coming to a neighborhood near you soon – in our July edition of “…In Plain English” (HERE).

Share this with a friend…even if they don’t know about the complete collapse in Sri Lanka.

They’ll thank YOU later.

We’re Not Just About Finance.

We simply use finance to give you hope.

https://www.financialsmatter.com/about/

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