Indebted countries are vulnerable to a precipitous loss of confidence even though that risk is barely acknowledged in bond markets, the Bank for International Settlements warned.
Likely bankruptcy of badly managed nations has little to nothing to do with MMT (except as something to whistle to the most hopelessly idiotic) and lots to do with corruption by the powerful mixed with mad management by world lenders.
Put simply, modern monetary theory decrees that such governments do not rely on taxes or borrowing for spending since they can print as much money as they need and are the monopoly issuers of the currency.
Nations and their banks will not go bankrupt as they can always print money. Trouble is their currency then becomes trash:
I hope that you are right. Warning from the FDIC and Federal Reserve:
The agencies have jointly determined that each weakness identified in the 2023 plans from Bank of America, Goldman Sachs, and JPMorgan Chase is a “shortcoming.” A shortcoming is a weakness that raises questions about the feasibility of the plan.
While that is certainly a large number, it is a bit difficult to put it into context (which admittedly is part of the problem).
I can’t find the official source for this data but you will find various links quoting the following:
55% – 60% of option contracts that are closed out prior to expiration (their value ends up being some fraction (either larger or smaller) of the face value - but most likely less than face value based on the ratio of worthless expiration vs exercised)
30% – 35% of option contracts expire worthless (so their value ends up being fictional)
10% of option contracts are exercised
Nor me, but the figure is widely quoted “cited by the FDIC” is the nearest I got. Most of the derivatives will be over the counter ones (private bets) that do not appear on anyone’s balance sheet.