They agree to "cancel" the locally
issued financial instruments by offering a "counter-financial-
instrument" (safe keeping receipt, contra-guarantee, counter
promissory note, etc.). This "counter-instrument" is issued by the
very Prime World or European Bank in which the locally issued
financial instruments are deposited as collateral.
The Investors invariably confidently claim that the financial
instrument issued by the local bank will never be presented or used
(which is true) and that this is a risk free transaction (which is
not entirely so).
If they are forced to lend to the bank's clients, they often ignore
the quality of the credit takers, the yields, the maturities and
other considerations which normally tend to interest lenders very
much.
Whether a financial instrument cancelled by another is still valid,
presentable and should be honoured by its issuer is still debated.
In some cases it is clearly so. If something goes horribly (and
rarely, admittedly) wrong with these transactions - the local bank
stands to suffer, too.
It all boils down to a terrible hunger, the kind of thirst that can
be quelled only by the denominated liquidity of lucre. In the post
nuclear landscape of this part of the world, a fantasy is shared by
both predators and prey. Circling each other in marble temples, they
switch their roles in dizzying progression.
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