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As they have every right to do. Taking out a loan is making a legally enforceable promise to pay back the money, and enforcement actions like that are the only
by mjfl 9y ago
As they have every right to do. Taking out a loan is making a legally enforceable promise to pay back the money, and enforcement actions like that are the only reason that people make the loans in the first place. I sure as hell wouldn't buy a Venezuelan bond.
- deleted 9y ago[deleted]
- supernumerary 9y agoI think the issue is that the enforcement happens in the West, and not so much that it happens. There are big law firms that stand to make a lot of money from the litigation. Furthermore there is likely a contractual obligation that this be litigated in the West. All of which incentivises buying up dubious debt that needs to be run through the legal system, basically it pays twice... see (mjfl's comment above) Furthermore, in the context of western exploitation/interference with these countries' economies, many of whom have not had recourse to a judicial process for reparations - your notion of what is rightful or fair is perhaps too narrow.
- varjag 9y ago> I think the issue is that the enforcement happens in the West, and not so much that it happens. Well face it, it either happens in the West or is not happening at all. And it's not like some obscure footnote, the arbitrage conditions are fully disclosed beforehand.
- mhuffman 9y ago>> and enforcement actions like that are the only reason that people make the loans in the first place. And also that delicious interest. You forget that the lenders already intend on getting something out of it. The reason they are getting interest at all is that there is a risk. If there was zero risk, there would be no need to pay interest.
- eonwe 9y agoOnly a part of the interest comes from risk. One important part is that if I were to give you 10$ in 10 years, it has less value to you than me giving you 10$ now (which is the difference between lending you lending to me and you not lending to me if you were 100% sure I would pay back).
- mhuffman 9y agoTime value of money is also based on risk. You are betting that there is an alternative sure thing at which you could earn some expected rate.
- baursak 9y agoThe part that comes from risk in this case is the biggest chunk of the interest though. If we assume that AAA-rated have "no risk".
- imiller 9y agoInterest is because of the time value of money and risk, not just risk.