Interesting outcome.
A US Way Out?
The US, as the country, is economically and militarily powerful enough to declare that it no longer honours its debt and its currency. Effectively the dollar could be written off as a currency. As around two thirds of world reserves are held in dollar they will be written off. The US will have no debt. Along this action, the US will introduce a “new dollar”. Any internal US old dollar liability will be converted into it, possibly with even 1:1 ratio. This will give seamless continuity to the US internal market. Any international debt will be negotiable. Some nations on which the US depends (like critical suppliers of commodities, e.g. crude oil) may get a favourable treatment. Other nations on which the US does not depend and especially those that may be perceived as prospective threat, rival or with conflicting interests may just get nothing. As a result they will be weakened.
Such actions will mark a completely fresh start for the US. Like a company coming out of Chapter 11 with a great deal negotiated (in this case imposed by the US itself). The entire pyramid collapse will become history in the US. The next year's budget will be hugely relieved from massive debt repayments. The Obama’s administration will be awash with cash to spend on any programme, including green energy, social programmes.
The Chinese certainly have it coming after
20+ years of mercantilism. What would they do if we told them to pound sand? Invade Taiwan probably. The Chinese people are
very nationalistic and that'll keep the masses occupied for a few months until they start demanding their tons of flesh from the Chinese Communist Party. Knock yourselves out.
Interesting outcome.
9 comments:
Casey Serin should be sent to a Chinese Prison.
So after we give everyone the middle finger, what then. We cannot go forward with a global economy without a level of trust. Modern Currencies are based on faith. And if the writer really thinks everyone is going to stand by while we f them just because we have a formidible military think again. Nuclr powers dont invade each other because of the ultimate trump card, but that doesnt keep all these countries aligning together, and especially china from hitting all our vulnerable spots with conventional attack especially when you take into account how over extended our military is at present. It just isnt a very well thought out position. Now with that being said, It is very possible that the fed will just print money to cover these debts and devalue the currency and screw people with dollar denominated savings in the process. With the way we have been spending money we dont have its a testament to how pervasive the dollar is in the world economy that its hasn't lost more value against other currencies already. Its because so many people have a vested interest in the dollar maintaining its position as a reliable store of value.
The Government sponsored entity, known as the Federal Reserve has pretty much done a jubilee. With it's printing of money, it has, partially, wiped out the value of any holdings in dollars.
As we learned with risk and bundling up Fannie Mae and Freddie Mac junk and selling off the risk, we will also have to, eventually, pay a price for the partial sticking to the Fed has done to dollar holders.
There is no free lunch. Pay now, or later, or get others to pay.
So after we give everyone the middle finger, what then. We cannot go forward with a global economy without a level of trust.
We can be selective. Who says we have to give Canada the finger? We should give the finger to countries that practice deliberate mercantilism and now whine about their bloated stash of US dollars. They're a bunch of damn hypocrites and have caused a great deal of damage to our economy.
I think it would be difficult to repudiate all the debt but do it selectively. If we honor bonds coming from canada, the evil mercantilists would just sell their
bonds to canada at a discount.
Since the debt repudiation is bound to happen at some point, maybe it's better if it happens now and not 40 years from now when I am too old to dumpster dive.
Or on the gripping hand, if it's going to happen then we should run that ol' credit card up, a chicken in every pot and a mazerati in every garage.
Yeah I loved the unprofitable Apple comment. Reminded me of an i'net argument about Warren Buffett's son...Jimmy.
What a completely asinine idea. Nobody would ever lend us a dime again. Several countries would be seriously destabilized, and it won't be hard for the populists there to point the finger. The US economy would go into free-fall as our international trade vanished. People's savings would be decimated - even if traded 1:1 for this new dollar - because your purchasing power would be reduced so much.
Dumb, dumb, dumb, dumb, DUMB!
please post more pics of scantily clad hotties
You invest in Apple.
Last divided, December '95. ( 13 and a half years ago ).
No profits for investors. Sorry, Homey don't do charity.
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