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So what might happen if the lender countries demand payment in full in gold... and there isn't any?
The Lending countries are some of our largest trading partners, so they have much more to lose than to gain from demanding payment of their debt. What is the point of demanding payment in a currency that will be worthless? How would they build wealth for themselves without the US consumer???
Also, they only own about 4-5 Trillion of our outstanding public debt which is close to 11 Trillion. Most of the Debt is owned by the American public and the US Government.
Social Security alone owns more than 3 Trillion worth of gov bonds, so i mean seriously come on, this doom and gloom talk is not unfounded, but it gets old and out of hand.
The Lending countries are some of our largest trading partners, so they have much more to lose than to gain from demanding payment of their debt. What is the point of demanding payment in a currency that will be worthless? How would they build wealth for themselves without the US consumer???
Also, they only own about 4-5 Trillion of our outstanding public debt which is close to 11 Trillion. Most of the Debt is owned by the American public and the US Government.
Social Security alone owns more than 3 Trillion worth of gov bonds, so i mean seriously come on, this doom and gloom talk is not unfounded, but it gets old and out of hand.
Resurrected an old thread of mine I see. Indeed unlike Iceland the debt is in USD which makes a huge difference. Again its a problem of having the world's reserve currency. If it is used in non-US transactions it will cause domestic deflation since money will flow out of the US. Eventually the outstanding dollars represent more value than the actual GDP. However 2009 is not out yet. We still have time to inexplicably extinguish the money supply.
Resurrected an old thread of mine I see. Indeed unlike Iceland the debt is in USD which makes a huge difference. Again its a problem of having the world's reserve currency. If it is used in non-US transactions it will cause domestic deflation since money will flow out of the US. Eventually the outstanding dollars represent more value than the actual GDP. However 2009 is not out yet. We still have time to inexplicably extinguish the money supply.
haha Gwynedd1 i didn't even notice the date on it haha, but glad i was able to add my .02 better late than never to a good debate
The Lending countries are some of our largest trading partners, so they have much more to lose than to gain from demanding payment of their debt. What is the point of demanding payment in a currency that will be worthless? How would they build wealth for themselves without the US consumer???
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So if everything runs on debt what the hell happens when the credit runs out? Or am I misunderstanding something here? Are all economies currently based on a credit card transfer type action?
If the countries we owe money to LOSE more by use paying our debt, are we really in debt?
Things sure looked a lot rosier back then during the Clinton Administration, didn't they? Funny how much more fiscally conservative he was than any Republican president in recent history. We'd be fine now if Bush had somehow kept to Clinton's timeline.
Maybe if the Democrats, Chris Dodd and Barney Frank specifically, never mandated that banks HAVE to give a certain % of loans to high risk and minority borrowers, the mortgage market would not have totally collapsed.
Unregulated trading of derivitives also was to blame. Also, entrenched, unsuspecting Madoff types were above the law for so long because of who they knew. Regulators should never belong to the same golf clubs or pray at the same synagogues as the slime merchants.
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