Intergalactic Summit

If i should make a educated guess, and try to put myself into Heths situation and his options at moment, if i were to guess, id suspect Heth is a secret guest among the Amarr Empire, mostly couse he dont have many places to go... And speculating in future events, he still have a impact among the Caldari State people, and backed by the Amarr, its anyones guess how things go, but it is in their interest to keep The State as a close allie... but just a alittle speculation and guessing from my part

A highly organized capitalist economy like the States is built on the framework of companies paying their debts.

A default of such a national scale would lead to a widespread unraveling up the foundations of the economy.

It would take a special brand of idiots to oversee defaulting on a national debt to secure some cheap political points.



Not that I would mind the ensuing chaos of course!

You forget that the State isn't an organized capitalist economy. While it is called the State, it doesn't practice state capitalism. In a sense, the capitalist are the state.Secondly, companies aren't built on the framework of paying debts, they are built on returning a profit to their investors. If a company is acquiring so much debt that it can't return profits, it's going to go under.

Also, in a virtually unrestricted capitalist system, there will always be winners and losers. If several megacorps default, then that will cause turmoil for some, but prosperity for others. The megacorps that don't default will have less competition and more room to expand.

I've always admired the State's economy, which is why I vote Progressor every election.

You need to go back to school, mon cher.


Here's a relevant lesson for you.

Modern interstellar corporations cannot function without the ability to often temporarily borrow vast sums of credits, ie incurring temporary debts. This is often incurred for making payroll, things of that nature. Money coming in and out from thousands of sources sometimes a little assistance is needed until things are squared up. This is the anachronistically named '[commercial paper]' market. Most large corporations make substantial short-term borrowings which are quickly repaid on a sometimes daily or weekly basis.

Interest rates are often better than private banking loans for this special corporate market. What keeps the market going? Often the only collateral is the 'word' of the corporation, and a repeated history of quickly paying back these loans in full.

The entire system is based on a reputation that corporation A will pay back its vast loan on a timely and full manner.

When a company fails to pay its debts, especially an enormous one the surrounding lending market becomes spooked and a negative feedback loop begins. Interest rates rise, money lending slows and restrictions are tightened. Borrowing money becomes more expensive, wages are pressed, and a general economic malaise can occur if the contagion is large enough.

CEP is large enough by far. They will always pay their debts on time.


There are plenty of other examples of how a modern economy is predicated on the concept of large debts being paid, but hopefully this example helps.

You might even say the entire capitalist economic system operates on faith. Imagine that.

You forget that it's not always necessary to take loans and that successful corporations often don't need to. The reason why a company would take a loan is because they don't have the capital, or enough time to make the capital in order to do what they need to do. Because of interest rates it would be impossible for a corporation to make a profit if it's constantly borrowing. The same thing applies to governments. The history books are full of civilizations who fell apart because they firmly believe that you can get out of debt by borrowing and spending more, despite all common sense and logic.

You are correct about how corporate loans work, however you seem misguided on their necessity and frequency of use.

Fredfred; any corporation that sees a valuable investment opportunity but doesn't have the funds on hand will naturally take on such debt as necessary to profit from said opportunity. Further, corporations shouldn't have large cash reserves on hand, as those reserves represent missed investment opportunities-- provided, of course, that they retain enough for daily operations, or that they believe there are no adequately tempting investment opportunities.

Instead of thinking of debt as an individual's credit line and a potentially onerous, long-term burden on said individual, think of it this way: the person has substantial investments, but it often takes days or weeks to free up funds. In the interim, if there's an opportunity, said individual will use credit to secure the good or service, which will then be paid off once a small portion of the investments are liquidated, or yield enough return to pay off the minor, short-term debt.

It's an awkward analogy, I'll admit, but it should line up well with Ms. Vitalia's description.

I thank the two of you for delivering an easy to understand explanation on how corporate debt and loans work. I've learned something today. Economics is something I'm fairly naive in as my main lines of work involves interstellar communications, media, politics, and warfare.

Again, thanks to you both.

(italics added)

Are you implying that he wears excessive makeup? I'm not really interested in scanning the news reports to verify. But, I'll take your word for it that his cheeks are way too rosey for common decency. Surely, this must play a part in Ms. Kim's hormonal infatuation with him.