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Then tell me whether IMF came in to save the US when the subprime crisis broke out in US. I don't underestimate the role of IMF, but in many occasions, IMF is not necessarily helping the suffering countries, but the sharks, especially towards emerging countries. I am pretty sure that the ASEAN lost more because of IMF. They could lose less if they just let those private corporations take their loss and go through bankruptcy and save the operating assets and forced the foreign creditors to accept conversion of foreign denominated debt into local currency debt. It is not as if IMF came in and helped the suffering countries gain credit from international credit market. Indonesia has not obtain credit from international credit market for many years even after IMF "saved" it. Look at Russia, is it really worse than Indonesia? Russia did default. Loss is loss, that government came in and help does not make it any less a loss.
Ceasing to exist is a different matter. Seldom, corporations just disappear from the planet earth. Bear Sterns is still alive inside JP Morgan. Part of Lehman Brothers is still alive in Barclays, part in Nomura. If I am not wrong, part of Long Term Capital Management is still alive somewhere, but in different form.
Certainly, government can come in, but not necessarily just to rescue the company, but to collect the remaining viable assets and operations. There is no reason that the government has to assume the liabilities of failing corporations. The US government did not assume GM's huge liabilities, only took a stake in GM after it went through bankruptcy. GM is a great American icon. There are wise and strong governments such as the US government, came in at the worst time of the crisis and bought cheap on various financial institutions, not only made a huge profit, but saved the economy from depression. There were dumb governments, I won't name it.
Ceasing to exist is a different matter. Seldom, corporations just disappear from the planet earth. Bear Sterns is still alive inside JP Morgan. Part of Lehman Brothers is still alive in Barclays, part in Nomura. If I am not wrong, part of Long Term Capital Management is still alive somewhere, but in different form.
Certainly, government can come in, but not necessarily just to rescue the company, but to collect the remaining viable assets and operations. There is no reason that the government has to assume the liabilities of failing corporations. The US government did not assume GM's huge liabilities, only took a stake in GM after it went through bankruptcy. GM is a great American icon. There are wise and strong governments such as the US government, came in at the worst time of the crisis and bought cheap on various financial institutions, not only made a huge profit, but saved the economy from depression. There were dumb governments, I won't name it.
Quote:And I reiterate: "Fiat is generally uncollaterised debt... there is no backing"So what do you mean? There exists one balance sheet where only one side exists? The liabilities side without the assets side? All issued notes or reserves are the liabilities of the central bank. So what's the assets side then? Nothing? All central banks are having negative equities? I don't know whether it is me who only lives on paper.