Friday, December 09, 2011

How It Works

So you lend money to states. There's a risk premium, sometimes sometimes large. You buy insurance to reduce your risk and transmute everything to gold. But the people you buy the insurance from can't possibly pay. You aren't really buying insurance, you're buying the appearance of insurance. It doesn't matter, because no matter how much of a risk premium you were getting, there will never be a default. Because.