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At which point your currency/bonds are worthless to everyone who doesn't have to pay taxes with them since you look for reasons to break your promises when thin
by ytinas 17y ago
At which point your currency/bonds are worthless to everyone who doesn't have to pay taxes with them since you look for reasons to break your promises when things don't go your way.
- yummyfajitas 17y agoA single repudiation in response to hostile acts, which occurred once in 80 years will certainly make everyone dump US debt? I doubt it. Maybe we will be downgraded from AAA to AA, but I doubt we would see more than that. In contrast, China would lose $600-800 billion and anyone else who wants to use debt as a weapon would think twice.
- sailormoon 17y agoI think you're underestimating the effect of the US pulling something like that. One of the main pillars of the US's strength is the absolute reliability and inviolability of its government debt. Attempting to unilaterally annul that debt, and for such capricious reasons, and I imagine the consequences would be both immediate and profound.
- yummyfajitas 17y agoChina engaging in open hostilities against us is "capricious"?
- sailormoon 17y agoYes, because it has nothing to do with the debt. And of course China would accuse the US of starting the war just so it could do that. Anyway, it's never going to happen. America's not going to start WWIII over Taiwan, talk about lose-lose.
- jacquesm 17y agoYou're misunderstanding something here, the selling off of the T-bills and other US dollar valued assets would be the extent of the hostilities. The rest will take care of itself.
- hga 17y agoAgreed with yummyfajitas: anyone who expects that the promises of financial instruments between belligerents will be honored in the case of war is delusional.
- deleted 17y ago[deleted]