'a system that needs a bailout with fiat money is already insolvent'
It's basically a truism
If something needs a bailout - it is insolvent
It is especially referring to the system of Central Bank-direct Fractional Reserve Banking, where inherently insolvent banks constantly expand the money supply way above the actual level of specie. In this case, unbacked legal tender (fiat) money will be needed if the consumers (rightly) lose confidence in the bank.
With a more specific question I could say more.
The difference between libertarianism and socialism is that libertarians will tolerate the existence of a socialist community, but socialists can't tolerate a libertarian community.