There might be a run from smaller banks to larger too big to fail ones. It’s difficult to tell.

In third world countries, deposit insurance is much smaller or non-existant. Most people keep bulk of their savings in the larger banks.

Even without FDIC, The Fed backstopped even non-bank institution debt in 2008. Will they still do that?

deleted by creator

trained on reddit

it hasn’t been very long, i think most of them will change their minds in a year.

Bangladesh and Sri Lanka are recent examples

See

Look at Volcker shock and its effects on global south countries. It’s not TINA, just that there will be adjustment costs with so much trade collapsing suddenly.

I think China, Oil Exporting countries should help global south countries by accepting their domestic currency debt if such an event happens.

That was the problem in post-2022 crisis. China, Saudi Arabia etc only accept Dollars and other first world currencies (or currencies of other large net exporters). They don’t want to accept debt denominated in currencies of net importers (except for the US and the West of course).

MMT says no sovereign currency issuing state can involuntarily default on its own currency debt (bank notes, Government bonds etc).

But Russia did it voluntarily, it always could’ve paid in Rubles but chose not to. The book then mentions US debt limit, another self imposed cap, that too is voluntary.

Trump not clearing certain obligatory payments is also a default, a voluntary one.

And the US is in a much better position currently than Russia was at the time, it doesn’t have to worry about massive currency depreciation worsening the already bad inflation.

Russia back then could have chose to make ruble payments but prevent conversion to foreign currencies but neoliberal brainworms.

US need not even prevent such conversions.

Also see

:yeltsin: moment?

Let’s turn to another example, Russia. Of course, Russia had been part of the Soviet Union and was already relatively developed and wealthy. However, dissolution of the USSR generated economic and political problems that we will not go into. In 1998 Russia shocked financial markets by defaulting on its government debt. Many people believe that Russia’s default is contrary to the MMT position that there is no default risk on sovereign government debt. It is clear that the debt was denominated in Rubles, the currency issued by the government. What went wrong? The key is its peg to the Dollar.

In August 1998, the Ruble was convertible into $US at the Russian Central Bank at the rate of 6.45 Rubles per $US. The Russian government, desirous of maintaining this fixed exchange rate policy, was limited in its willingness to pay by its holdings of $US reserves, since even at very high interest rates holders of rubles desired to exchange them for $US at the Russian Central Bank. Facing declining $US reserves, and unable to obtain additional reserves in international markets, convertibility was suspended around mid-August, and the Russian Central Bank had no choice but to allow the ruble to float.

The peg was to allow for capital flight by the oligarchs btw.

Throughout this process, the Russian Government had the ability to pay in rubles. However, due to its choice of fixing the exchange rate at a level above ‘market levels’ it was not, in mid-August, willing to make payments in rubles. In fact, even after floating the ruble, when payment could have been made without losing reserves, the Russian Government, which included the Treasury and Central Bank, continued to be unwilling to make payments in rubles when due, both domestically and internationally. It defaulted on ruble payment by choice, as it always possessed the ability to pay simply by crediting the appropriate accounts with rubles at the Central Bank.

Why Russia made this choice is the subject of much debate. However, there is no debate over the fact that Russia had the ability to meet its notional ruble obligations but was unwilling to pay and instead chose to default. As best one can determine, it was a political decision. We cannot completely ignore politics.

book

great choice, not good for amerikkka.

I think Trump wants SWF not because a sovereign state could save its own money but like other SWFs to buy up real assets in other countries.

NOAA drip

There will have to cooperation between Fed and state.

The state Government owned banks will issue debt (demand deposits) that are fully convertible to Federal debt (bank notes, transfers to other banks).

Given that federal government can’t be relied upon currently to provide state Gov owned banks (because DOGE) with sufficient Fed Gov reserves it’ll be difficult.

Really though the states should start having their own Dollars. Virgina Dollars, Rhode Island Dollars with different exchange rates against one another and no guaranteed convertibility to Federal Dollars.

All Federal denominated debts converted to State Dollars. Income Tax collection all done by “State Revenue Service” or something like that in State Dollars.

why he suddenly back to being like this? i don’t follow much pop news but he was quite quiet for some time, no?

Vought

Why is private sector doing nuclear energy? It’ll take large amounts of subsidies anyway since the private sector doesn’t do anything if they don’t forsee profits. Might as well have it in the public sector which doesn’t have to worry about monetary profits.

I don’t think much is happening in UK with regards to anything productive like wind or nuclear so long as the Government doesn’t do stuff. Starmer is servile to finance capital interests. He is more interested in seeing the line go up.

:no-waying:

The agreement allows two individuals associated with Musk but employed by the Treasury Department – called special government employees – to have “read only” access to the sensitive data.

Islamist reactionaries demolish the house of Bangladesh founding father Sheikh Mujibur Rahman

Completely planned. Certainly done by BNP and Jamaat fundamentalists.

Looks like the Wiki page on Jamaat Bangladesh has been edited to show their ideology as “moderate” even though they collaborated with Pakistan during the genocide.

2024 was a great year for these Muslim Brotherhood allied parties.