“Sovereign Debt” remains affordable ONLY by means of inflation of the fiat debt currency and the destruction of the financial stability of the Middle Class - the foundation of any liberty-oriented form of government.
In a long ago Sunday morning interview show, Walter Wriston was being interviewed. Wriston was then Chairman of CitiCorp and his bank held a fair amount of the sovereign debt of Poland. Poland was asking to borrow more to cover the interest owed on the CitiCorp notes it couldn't pay. This was during the Communist era of Poland.
The interviewer was asking why the Federal Reserve should allow Poland and CitiCorp to do this, since under ordinary circumstances the Poland notes would be deemed in default and require bank reserves to cover them, limiting CitiCorp's other lending.
In answer Wriston said that 'governments almost never repay principal.' That comment somehow stuck with me.
I was curious so looked him up. Wikipedia has a list of memorable Wriston quotes. I think they all remain timely:
Capital goes where it's welcome and stays where it's well treated.
Information about money has become almost as important as money itself
Countries don't go bust [consistent with his Poland stance]
The 800 number and the piece of plastic have made time and space obsolete [now the internet]
The Eurodollar market exists in London because people believe that the British government is not about to close it down
It is inconceivable that any major bank would walk away from any subsidiary of its holding company. If your name is on the door, all of your capital funds are going to be behind it in the real world. Lawyers can say you have separation, but the marketplace is persuasive, and it would not see it that way.[16]
“Sovereign Debt” remains affordable ONLY by means of inflation of the fiat debt currency and the destruction of the financial stability of the Middle Class - the foundation of any liberty-oriented form of government.
In a long ago Sunday morning interview show, Walter Wriston was being interviewed. Wriston was then Chairman of CitiCorp and his bank held a fair amount of the sovereign debt of Poland. Poland was asking to borrow more to cover the interest owed on the CitiCorp notes it couldn't pay. This was during the Communist era of Poland.
The interviewer was asking why the Federal Reserve should allow Poland and CitiCorp to do this, since under ordinary circumstances the Poland notes would be deemed in default and require bank reserves to cover them, limiting CitiCorp's other lending.
In answer Wriston said that 'governments almost never repay principal.' That comment somehow stuck with me.
I was curious so looked him up. Wikipedia has a list of memorable Wriston quotes. I think they all remain timely:
Capital goes where it's welcome and stays where it's well treated.
Information about money has become almost as important as money itself
Countries don't go bust [consistent with his Poland stance]
The 800 number and the piece of plastic have made time and space obsolete [now the internet]
The Eurodollar market exists in London because people believe that the British government is not about to close it down
It is inconceivable that any major bank would walk away from any subsidiary of its holding company. If your name is on the door, all of your capital funds are going to be behind it in the real world. Lawyers can say you have separation, but the marketplace is persuasive, and it would not see it that way.[16]