Could the U.S. financial system collapse?
If I were to bet, I’d bet yes. What should be done to avoid that? That’s a hard question to answer, like a doctor who must say something to a patient with cancer. America needs an intermediary like KAMCO [to buy and dispose of distressed assets]. I was impressed when I heard the news that Washington may establish a restructuring agency. They could raise money by issuing bonds, which would [reduce] uncertainty and stabilize markets. But they would need big money to do that. KAMCO spent $39 billion in Korea nine years ago. How much to you think a similar rescue would cost in the United States? A hundred times as much. Is the American model of free-market finance dead? Not dead, but tested very seriously. The period of [excessive] prosperity lasted too long. Once, we viewed the American style of capitalism as the best model for the world. We thought your investment banks were fantastic without a detailed understanding of their methods. Nowadays, we realize they are very vulnerable and tha
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