| Author |
 Topic  |
|
|
theo
Penny Hoarding Member
USA
588 Posts |
|
|
Nickelless
Administrator
USA
5580 Posts |
|
|
Delawhere Jack
1000+ Penny Miser Member
USA
1680 Posts |
 Posted - 02/04/2009 : 21:27:25
|
quote:
Originally posted by theo
I hope he's wrong.
Sadly, he's almost certainly correct. |
"Educate and inform the whole mass of the people... They are the only sure reliance for the preservation of our liberty." Thomas Jefferson
|
 |
|
|
fb101
Administrator
USA
2856 Posts |
Posted - 02/04/2009 : 21:47:15
|
| That's precisely how things will start, a lack of interest in buying treasuries. Reasonably quickly it will turn to panic selling in treasuries pushing interest rates up. Interest rates up = dollar down with the spectre of slowing GDP and deflation. Traditional buyers fail to step up to the plate to snap up the high yields because they're running for safety in PMs. I figure the whole thing will take only a few weeks. |
 |
|
|
|
Nickelless
Administrator
USA
5580 Posts |
|
|
theo
Penny Hoarding Member
USA
588 Posts |
Posted - 02/05/2009 : 07:55:21
|
In 1991 I read a book claiming that the dollar was sure to collapse by the end of the 20th century. That event is at least 10 years late. People like to point to the Tulip craze, The Wiemar Republic and Argentina; but the problem is they simply don't compare to the U.S. economy. It will take a lot more to bring down our economic system than most realize.
While I recognize the problems of fiat currencies and an $11 trillion national debt, I don't believe default is ememant. For the dollar to totally collapse, there has to be a viable alternative. Considering the state of other curriencies and the government's ability to create and destroy money with a keystroke, I believe the debt can get much higher before the bubble bursts (20 to 25 trillion perhaps). My first concern is that when the collapse does occur (in 3 or 4 years perhaps) it will be much worse. My second (and more paranoid) concern is that some in the government can use currency controls to cause a default at a time of their choosing, in order to introduce a global currency. |
|
|
|
fb101
Administrator
USA
2856 Posts |
Posted - 02/05/2009 : 12:31:06
|
| Yes we can be thankful that 1984 never happened either. Imagine a world where the language was being altered so there were no words to think incorrect thoughts with. (Unless you were vocabularily challenged) and a press that told you what they want you to hear instead of what the truth is. Here we are in 2009 and thank God things aren't like that! |
|
Edited by - fb101 on 02/05/2009 12:31:54 |
|
|
|
theo
Penny Hoarding Member
USA
588 Posts |
Posted - 02/05/2009 : 14:27:47
|
I basically agree with everything that is being said here; its just that I think it will take longer. People who think its going to happen tomorrow are under-estimating that government's ability to maintain the perception that the dollar has value. Also, I'm that FB agrees that the press will play along. I've heard the expansion of the money supply referred to as the "dollar bubble." One thing I've noticed about bubbles is that they last longer than logic dictates they should as they are nothing more than mass examples of groupthink. But make no mistake the dollar will be consumed by the debt one day, unfortunately that debt will get much larger than most expect.
|
|
|
|
fb101
Administrator
USA
2856 Posts |
Posted - 02/05/2009 : 20:49:15
|
Theo, if that were the only thing in play, I'd agree with you totally. The problem is that only foreigners have been financing our debt for the last 20 years or more. If they quit doing that, there isn't enough free capital in the entire U.S. to cover our upcoming federal deficit. Even the Gates-es and the Buffets-es don't have the cash to do it. They would have to liquidate every holding they have, and it still wouldn't be enough. In the midst of this fiasco they are pushing the usual unsupportable spending like SCHIPS. So they print money to buy the treasuries, devaluing the dollar and making it LESS attractive to foreigners, and the situation worsens. I suppose I hope you're right because I do not believe we'll ever get our gov't to settle down and go back to being a constitutional gov't instead of a charity for every !@#$%^&*(*&%(*&^%$#@! out there who hasn't the "intestinal fortitude" to try to make it on their own. (Exceptions given for the truly needy, like paraplegics)
SCHIPS is a great example of how the gov't is busy cutting it's own throat and ours with it. Cigarette taxes up 62c per pack = fewer cigarettes sold (some people will cut down or quit) and that will unemploy more workers and in the end produce little or no extra income for the gov't, leaving SCHIPS basically unfunded. More debt for the welfare state. And all those foreigners, along with me, are saying "Bah !@#$%^%$#@! humbug". |
|
|
|
|
swusc
Penny Hoarding Member
USA
553 Posts |
Posted - 02/05/2009 : 22:03:15
|
How many times does this need to be said. It is impossible for the U.S. government to default on USD dollar debt. They can destroy the dollar, but defaulting is impossible.
They can just print the money. The US government has $1,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000.00 When that runs out, then the dollar will be worthless if not before... yet defaulting on the debt isn't going to happen.
-SWUSC |
`Everybody is ignorant. Only on different subjects.' Will Rogers
"This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the "hidden" confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard." Alan Greenspan, 1966. |
|
|
|
NotABigDeal
1000+ Penny Miser Member
USA
3890 Posts |
Posted - 02/06/2009 : 06:26:17
|
quote:
Originally posted by fb101
Theo, if that were the only thing in play, I'd agree with you totally. The problem is that only foreigners have been financing our debt for the last 20 years or more. If they quit doing that, there isn't enough free capital in the entire U.S. to cover our upcoming federal deficit. Even the Gates-es and the Buffets-es don't have the cash to do it. They would have to liquidate every holding they have, and it still wouldn't be enough. In the midst of this fiasco they are pushing the usual unsupportable spending like SCHIPS. So they print money to buy the treasuries, devaluing the dollar and making it LESS attractive to foreigners, and the situation worsens. I suppose I hope you're right because I do not believe we'll ever get our gov't to settle down and go back to being a constitutional gov't instead of a charity for every !@#$%^&*(*&%(*&^%$#@! out there who hasn't the "intestinal fortitude" to try to make it on their own. (Exceptions given for the truly needy, like paraplegics)
SCHIPS is a great example of how the gov't is busy cutting it's own throat and ours with it. Cigarette taxes up 62c per pack = fewer cigarettes sold (some people will cut down or quit) and that will unemploy more workers and in the end produce little or no extra income for the gov't, leaving SCHIPS basically unfunded. More debt for the welfare state. And all those foreigners, along with me, are saying "Bah !@#$%^%$#@! humbug".
Right on! I hear you.
Deal |
Live free or die.
Plain and simple.
"If you love wealth more than liberty, the tranquility of servitude better than the animating contest of freedom, depart from us in peace. We ask not your council or your arms. Crouch down and lick the hand that feeds you. May your chains rest lightly upon you and may posterity forget that you were our countrymen."
- Samuel Adams |
|
|
|
Delawhere Jack
1000+ Penny Miser Member
USA
1680 Posts |
Posted - 02/06/2009 : 10:20:22
|
quote:
Originally posted by swusc
How many times does this need to be said. It is impossible for the U.S. government to default on USD dollar debt. They can destroy the dollar, but defaulting is impossible.
They can just print the money. The US government has $1,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000.00 When that runs out, then the dollar will be worthless if not before... yet defaulting on the debt isn't going to happen.
-SWUSC
Default or print, the end result is the same, toilet paper currency.
|
"Educate and inform the whole mass of the people... They are the only sure reliance for the preservation of our liberty." Thomas Jefferson
|
|
|
| |
Topic |
|
|
|
U.S. Debt Default?
Forum Locked
