The way it works in a free market: If a profitable corporation spends all its cash on dividends, then suddenly needs cash to continue operating... it gets a loan. Sometimes it goes through bankruptcy, shareholders get wiped, and bondholders get shares; then it gets a loan. 1/5
The part where the shareholders suddenly get wiped out, is the incentive for future owners to keep a bigger cash reserve. 2/5
If nobody in the free market will make that loan at any interest rate, even after the bankruptcy wipes the previous debts, it means this business concern is believed to never be able to pay back more than is invested into it. So it should be allowed to die. 3/5
If the system in general is having trouble making loans to anybody, this means that the central bank is asleep at the wheel. The central bank should in this case create more general money in the system to be lent - not target it to particular struggling corporations. 4/5
This concludes your lesson in the old codes of conduct, as they once were, with rewards for virtue and punishment for sins. Nobody understands any more and fewer care, but I will still hold that flame aloft until the last day. 5/END.
