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You're not sure financial institutions would prefer being paid something rather than nothing. Could you please elaborate?
by xorcist 12y ago
You're not sure financial institutions would prefer being paid something rather than nothing. Could you please elaborate?
- deciplex 12y agoI'd imagine, it's that the damage caused by massive inflation does not start and stop at what financial institutions would prefer. (For that matter, financial institutions would probably prefer a haircut on their Japanese bond holdings, over the 3rd largest economy going up in smoke.)
- nandemo 12y agoAt a high enough rate (e.g. war time Germany, 1980s Brazil, Zimbabwe), hyperinflation will turn your nominal returns into next-to-zero real returns. Conversely, default doesn't have to be "we won't pay nothing". A country can partially default.