SS, debtors lose what assets they had. Savers might or might not lose their savings, depending on the bank and government support for banks. Savers with cash in the mattress, government bonds, gold, house, land and other real stuff will weather the storm, though government bonds and cash might be financially reset at perhaps 10 old money units for 1 new one if the old money is cancelled. Or, the old money might be simply diluted by the wheel-barrow full, or by the giga-pixel.
A debtor with a 100% borrowed house, net negative asset value, but lots of borrowings, gets any speculative gains, but in the event of a big crunch only gets bankruptcy, which is no big deal in the USA and no big deal anywhere if enough people are in the process. The savers who loaned the debtor the money, be they banks or individuals who have money in the banks, are the ones who lose their money.
Savers are looked on as the suckers in the community, to be robbed when necessary. Savers have to save themselves.
Mqurice |
