Fishman wrote:Though the US may default, it looks like others will proceed the US. Will their fall give us warning, will it be all default at once or dominos?
With an economy in flames how will Obama provide anything he's promised?
pogoliamo wrote:US is not going to default without trying to monetarize its debt.
US is not going to default without trying to monetarize its debt.
In short, it wouldn't have done anything because the economy only grows at a rate of about 20 cents for every dollar of debt taken on. That is, it takes five dollars of debt to generate one new dollar of GDP.
The bad news is that once you reach the "$1 for $1" level you are no longer able to finance growth with debt, and it becomes inevitable that you will begin to finance debt with debt.
That, of course generates no GDP at all but precipitously tightens the spiral.
The Truth is that once you reach a level where a dollar in debt will not support a dollar in GDP you must inevitably either pay down or default that excess debt. Unfortunately, in this case we must pay down or default approximately 80% of the aggregate public and private debt in the United States in order to return to a standard were $1 in debt will generate $1 in GDP. Defaulting or paying down less will "turn the clock back" to a degree, but does not change the ultimate outcome. Only returning to $1 of debt returning $1 or more of GDP, and holding the total level of debt outstanding at or below that level, results in a stable monetary system.
virgincrude wrote:pogoliamo:US is not going to default without trying to monetarize its debt.
Of course. But that's what they've been doing for so long now, that it simply won't work anymore. How the heck do you monetise 10+Trillion Dollars of debt.....? You don't. You default.
virgincrude wrote:We all know the US is a technically bankrupt nation. What will happen when it becomes officially bankrupt? Can The US economy claim Chapter 12?
Answers/thoughts please.
Cid_Yama wrote:We borrow billions every day just to fund the interest payments. 60% of US debt is due in the next year.
We need to borrow to roll it over. Foreign nations who are our creditors are showing an unwillingness to purchase any more US debt.(loan us any more)
When we cannot borrow to roll over the debt, we go into default.
We are then essentially bankrupt.
Cid_Yama wrote:We borrow billions every day just to fund the interest payments. 60% of US debt is due in the next year.
We need to borrow to roll it over. Foreign nations who are our creditors are showing an unwillingness to purchase any more US debt.(loan us any more)
When we cannot borrow to roll over the debt, we go into default.
We are then essentially bankrupt.
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