I bought shares in CIT Group Inc when the stock had crashed to pennies. My theory was Geithner would bail this entity out like he had the Majors. He did not, but he did give the bond holders one hundred percent on the dollar of their investment. I will frame my receipt of bankruptcy soon, as to remind myself of the crazy world finance lives in.
I got to thinking, what will happen if the US defaults? What is the debt, and what is the equity? Who will get paid? We know what the debt is, those are the bonds. It has been my belief that either the World Bank or the IMF will restructure the central bank debt of the world and collateralize the debt owed to gold. This will mean that the proportion of debt will be in terms of what gold is worth, and each central bank will pay each other off will whatever gold reserves they have.
In my view, the equity is the dollar, and all fiat. This is a fresh thought, so maybe the equity is something else, but as far as know, I think that fiat is the equity that has been created by the central banks. I will think this through further.
I will also take this time to thank all of my readers. This blog has been my privilege, and I am happy you have enjoyed it. There are steady hits from all over the globe, and I am glad you all feel welcome to read here; you are, and thank you again!