Thread: Will the United States default on foreign debt?

Originally Posted by R3dKnight

The War in Iraq should have solves all your economic problems

Sorry, am not american

If the US cancels the debt, the rest of the word is fucked. However, world powers would still have to deal with us.

It's a sleazy move but it might be our only option.

Originally Posted by 4n0n¥m0µ$

Japan and China a for sure worried to get their money back. After the eight years of Bush desaster it doesn't look good at all. On the one side the biggest state debt ever and on the other side the recession that will hit the US very hard. Many jobs will get lost this year when companies like GM, Chrysler and Banks will go bankrupt. And that's still the pike of the iceberg. The home market is going to break away and no none buys american products outside the country.

I'm thinking the same thing you are. There simply might be too much debt to recover from and with all these extra 900 billion+ bailouts it might hurt the United States status as a reserve currency.

Originally Posted by EightBall

Kekeke. "Made in the USA" is not a brand.

Originally Posted by EightBall

It's a shame. Kekeke. This will be the first country that becomes insolvent. And they didn't even realize yet how fucked they are. Obama will have his four years than they vote republican again. Kekeke. And England's next. A economy that only makes money out of money? Brainless. Kekekeke

The only thing "Made in the USA" would be things produced by Financial Engineer's. We've let our manufacturing sector and pretty much everything else die. We've become a greate place to outsource call centers to and a great place to open a fast food joint but actually making things to help get out of debt ... that is another story.

Originally Posted by Henchy432

If the US cancels the debt, the rest of the word is fucked. However, world powers would still have to deal with us.

Originally Posted by Henchy432

It's a sleazy move but it might be our only option.

That would not really be an option. It would result in a lot of bad will. We might not ever be able to sell our debt to anyone again; we would probably never become a superpower again. The more realistic option is simply to print more money that is what all other countries do at least if my memory is correct. Look at what happened with Zimbabwe. There is a reason they are printing 100 trillion dollar bills.

Originally Posted by Kevin Shiel

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That would not really be an option. It would result in a lot of bad will. We might not ever be able to sell our debt to anyone again; we would probably never become a superpower again. The more realistic option is simply to print more money that is what all other countries do at least if my memory is correct. Look at what happened with Zimbabwe. There is a reason they are printing 100 trillion dollar bills.
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Other counties would still have to deal us. It's true, that no one would buy our debit. However, by defaulting the other counties we owe would then have debt of their own. Maybe giving the US a chance to bounce back. Printing money is bad idea. It lower the value of our dollar to third world levels.

Originally Posted by Henchy432

Other counties would still have to deal us. It's true, that no one would buy our debit. However, by defaulting the other counties we owe would then have debt of their own. Maybe giving the US a chance to bounce back. Printing money is bad idea. It lower the value of our dollar to third world levels.

We are too big of a country to ignore so I agree they would have to deal with us. I personally feel we still won't default on our debt, that would look far too bad for us. They have already started printing money to pay debt and the cycle will continue I am sad to say. The government is not able to live within its means, partly do to lobbyists and the people in congress wanting what I call kickbacks and we are forced to remain in debt because of this. It's true though that the value of the dollar either way due to a lack of faith will continue to decline, its too late to stop things now.

If the US dollar does collapse I am safe. I've been converting all my savings to Euros and Canadian Dollars as soon as I get it.

Originally Posted by EightBall

This will be the first country that becomes insolvent.

That's incorrect; quite a few countries have gone bankrupt before:
http://www.spiegel.de/international/...588419,00.html

and Iceland being quite recent in memory.

War only stimulates economy because government spending goes up (every dollar that's put into the system is worth more than a dollar in the end). The stimulus bill is supposed help in that aspect.

... but there's one problem. Where exactly does the money for all this come from ? It *should* come from taxes, but as most people know, a lot of that money is borrowed and adds to the crazy debt. No offense, but americans really, really need to stop complaining about taxes and how it equals socialism (it does not, btw). Out of the industrialized nations, americans have one of the lowest tax rates.

As I said in my previous post, america almost certainly will not go bankrupt. The powers-that-be do not want a destabilized world, and will do everything in their power to keep america afloat.

Still, good job on converting into canadian dollars =)

We (yes, i'm canadian eh) have one of the most stable - if not THE stablest - financial system right now; it's because our banks were extremely conservative and did not dive into those crazy new-fangled mortgage-backed securities. Out of the top 17 banks right now in market capitalization; Canada has 5 (!) Considering how specialized/localized our banks are, for them to be competing with giant national banks around the world is quite the feat.

in b4 tl;dr

Originally Posted by echoblaze

We (yes, i'm canadian eh) have one of the most stable - if not THE stablest - financial system right now; it's because our banks were extremely conservative and did not dive into those crazy new-fangled mortgage-backed securities. Out of the top 17 banks right now in market capitalization; Canada has 5 (!) Considering how specialized/localized our banks are, for them to be competing with giant national banks around the world is quite the feat.

in b4 tl;dr

the stablest for now.......
just wait till all the Americans start fleeing to Canada.


But I also see that no one have mentioned about the American military/Army
which should spend more then China/Russia and Whole Europe combined

Originally Posted by R3dKnight

the stablest for now.......
just wait till all the Americans start fleeing to Canada.

LOL. I just remembered that South Park episode... Blame Canada

But I also see that no one have mentioned about the American military/Army
which should spend more then China/Russia and Whole Europe combined

But... but... but.. America needs to maintain its toys until it has chosen the next terrorist...

Originally Posted by R3dKnight

the stablest for now.......
just wait till all the Americans start fleeing to Canada.


But I also see that no one have mentioned about the American military/Army
which should spend more then China/Russia and Whole Europe combined

Yeah, wait until all our Bankers start getting jobs at Canadian banks once the ones here in America crumble. Canada might not be safe for very long.

Originally Posted by Kevin Shiel

I came across an interesting article on Bloomber yesterday about Japan concerned that the United States might default on our debt. 40% of Japan’s investors are afraid we might not be able to pay our debt. Right now the US has about 10 trillion in debt with a projected ~50 trillion if we were to include debt that is not yet due for Social Security and other government programs.

I personally think it’s inevitable that eventually all our debt will cause serious problems, the government with all that it tries to do with giving away foreign aid and failing to live within its means as we all should. I think it comes down to two different options, one we will default on our debt or two the more realistic option is we have the federal reserve print more money which basically destroys the value of our currency.

What are your guy’s thoughts on all of this?

The link to the main article is here.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aQo2GvoJdKVU

the federal reserve print will more money and the dollar will be so low that you'll be able to overnight in a suite in Las Vegas for 100€.