Professor Elam

One of the most basic liquidity ratios is the current ratio, current assets versus current liabilities. Better yet, the acid test kicks out inventory and then looks at the debt. This author explains that ratio in terms of countries. Which is to say

"The minimum benchmark of reserves equal to at least 100% of short-term external debt is known as the Greenspan-Guidotti rule. Greenspan-Guidotti is perhaps the single concept of reserve adequacy that has the most adherents and empirical support."

My sense is that this Titanic headed to the iceberg scenario is off the radar screen for most students, and investors, it should not be, it will be the biggest thing to happen in your life, thus far.