Le Baron
Unbiased advice at reasonable rates
It would likely have engendered a panic in some quarters, though I assure you people right at the top of the market know exactly how spending is created. Your Warren Buffets and George Soros types are very aware of how the machinery of a monetary economy works with a sovereign issuer; this is why none of them ever worry about 'default' or payments being made.I'm sure that sentiment in international currency markets was driven by the commitments attached to the loan rather than the loan itself. Interesting to speculate what would have happened to the exchange rate if we had instead expressed an intention to create currency to fill the gap.
The fact of the matter is that the 'creation of currency' is not an unusual strategy for an unusual situation, it is how such government spends all the time.