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Comment by nocoiner | Hacker News Reader

I wonder which will turn out to be a better investment for the US government, the Intel stock or the Argentine pesos. I really don’t think I’d care to hazard a guess either way…

Gun to my head, I might actually say Argentina. Countries can’t go bankrupt after all, but shareholders can always get wiped out.

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> Countries can’t go bankrupt after all, but shareholders can always get wiped out.

Yes they can, and they can default on their debts. Argentina has defaulted several times:

https://en.wikipedia.org/wiki/Argentine_debt_restructuring

Default isn’t the same as bankruptcy. If it were, Argentina wouldn’t have gotten shafted by Paul Singer or had one of its naval vessels seized on a port visit abroad.

I didn't say they were the same. Did you read my comment or mean to respond to something else?

I said countries can’t go bankrupt. You said yes they can, and yes, they can default on their debts. I said default and bankruptcy isn’t the same thing, so a.) being in default doesn’t mean you’re in bankruptcy and b.) as far as I know, there’s no bankruptcy regime for sovereign nations (with the possible exception of PROMESA for Puerto Rico if you squint but that’s probably the exception that proves the rule).

I assume I am misunderstanding something you are saying or we are just talking past each other.

> there’s no bankruptcy regime for sovereign nations (with the possible exception of PROMESA for Puerto Rico if you squint but that’s probably the exception that proves the rule).

Puerto Rico is not sovereign (either in the international sense, or even in the more limited US-specific legal sense that US states are), it is a dependent territory of the United States. PROMESA thus is no more, and aeguably less, of an exception than federal Chapter 9 municipal bankruptcy (which applies to agencies, instrumentalities, and subdivisions of states, though not to states as a whole.)

Right, the distinction between Puerto Rico’s status …. whatever it is (yeah, yeah, organized unincorporated possession …. whatever that is) and U.S. states led me to surmise that Puerto Rico is actually slightly more sovereign than a U.S. state particularly in the context of insolvency, since it was granted powers that states lack under Title 11, and does have certain features of self-governance that states lack via the feds. But that was an off-the-cuff comment on my part, and I find your argument compelling.

Countries can go bankrupt, it is just not shareholders, but the population that gets wiped out.

Countries can default on their obligations or become insolvent, but there’s no sovereign bankruptcy forum for restructuring a country’s debts in an orderly process by which all creditors are bound. That’s the difference between insolvency and bankruptcy.

Sure terms aside, someone still pays the consequences, just not necessarily the rich.

The rich bank depositors in Cyprus got pretty, pretty wiped out when they bailed-in the banks after the banking system collapsed. Lots of them were Russian oligarchs stashing funds abroad, so my sympathy for them is extremely extremely limited.

Not sure if they were completely wiped out, may be just a fraction of their wealth that did - ex: their insurance policy. The working and poor class have less room to cope for disasters.

All the semantic nonsense aside, the question is whether the U.S. cannot lose money by giving it to Argentina because they cannot go “bankrupt”.

Either the meaning of bankrupt is one which doesn’t apply to countries, in which case it’s a complete red herring to the question of whether an investment in a country can lose money, or we use a looser definition of the term “bankrupt” which the responder generously did that would allow a country to go “bankrupt” and an investment in it could lose money.

Either way, the only useful claim, that the US cannot lose money by investing in Argentina is almost certainly false.

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