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there is more than faith involved. If you compare the U.S. to the rest of the world in terms of wealth, measured by productive land, population density, indust

there is more than faith involved. If you compare the U.S. to the rest of the world in terms of wealth, measured by productive land, population density, industrial development, and access to critical natural resources it is still in the #1 position and has the best natural defenses with no hostile nations on its borders. Economics is all relative. Even if the U.S. is a disaster in many ways it only has to be as good or better than other large economic blocks in order to be competitive. Since the U.S. is in a superior territorial position and has the advantages of accumulated wealth and knowledge you really have to go out of your way to f--- things up for the U.S. to ever fall out of a leadership position. Consequently, a "plunge" is very unlikely. More likely is a few more decades of high inflation, which is just a backdoor way to default on pension, social security, and debt obligations, followed by some kind of new stasis. The people buying US debt are not dumb. They fully understand that it is impossible for the debt to ever be "paid" in any conventional sense. What they are betting is that the U.S. is still a better investment than other nations and that owning U.S. debt gives them leverage and access that outweighs the nominal losses. That is unlikely to change.

eternalban 9y ago
> he people buying US debt are not dumb. You are right. When presented with offers you can not refuse the smart thing to do is to go along, as a matter of survival. > Since the U.S. is in a superior territorial position and has the advantages of accumulated wealth and knowledge you really have to go out of your way to f--- things up for the U.S. to ever fall out of a leadership position. They really have gone out of their way. I give it 5 years tops and U.S.A. will be given its U.S.S.R. moment. Don't worry, no actual oligarch families will be harmed in this process.
alphaalpha101 9y ago
>Consequently, a "plunge" is very unlikely. More likely is a few more decades of high inflation, which is just a backdoor way to default on pension, social security, and debt obligations, followed by some kind of new stasis. Decades of high inflation? What? The issue is that inflation is low not that it's too high. Unless you're of the generation that thinks that 5% inflation is high...
empath75 9y ago
> has the best natural defenses with no hostile nations on its borders. I think the US is in the middle of a cyberwar with Russia (which it may have already lost) in which physical borders mean very little.
- corpMaverick 9y ago
  It has become more evident that national security should be focused on strengthen digital security in all its economic entities. i.e. Making sure that every company has good security policies. This is where a lot of damage can be done by an external state actor.
mooreds 9y ago
Agreed. The US is in a tough spot, but the rest of the world is in an even tougher spot. Definitely with regards to geography, but also with regards to demography (the only continent where population is continuing to grow is Africa). Worth reading: "The Accidental Superpower", https://www.amazon.com/Accidental-Superpower-Generation-American-Preeminence/dp/1455583685 https://www.amazon.com/Accidental-Superpower-Generation-Amer...
- ac29 9y ago
  >the only continent where population is continuing to grow is Africa No, the only continent where population isn't growing is Europe [0], where it is relatively flat. Everywhere else is growing. For individual countries, the only ones with negative growth are in Europe, Islands, and Syria [1]. [0] https://www.statista.com/statistics/270859/natural-rate-of-population-growth-by-continent/ https://www.statista.com/statistics/270859/natural-rate-of-p... [1] https://data.worldbank.org/indicator/SP.POP.GROW?year_high_desc=false https://data.worldbank.org/indicator/SP.POP.GROW?year_high_d...
  - toasterlovin 9y ago
    Yeah, but birth rates have fallen below replacement in huge swaths of the world. And Pakistan is the only country outside of Africa that has fertility rates above 3 children per women. Which means that, if the demographic transition continues, the entire world except for Africa will be at below replacement fertility in several decades. Population can continue growing for a while after birth rates fall below replacement, but the writing is on the wall: if Africa can modernize, then the world population will start declining. https://en.wikipedia.org/wiki/Sub-replacement_fertility#/media/File:Countriesbyfertilityrate.svg https://en.wikipedia.org/wiki/Sub-replacement_fertility#/med...
    - mooreds 9y ago
      Thanks to both you and GP for digging up the facts!
      - 9y ago
nradov 9y ago
It's going to be difficult to fully inflate our way out of the coming national debt crisis. When debt service becomes too much of a burden I expect that policy makers will also choose some sort of technical default where Treasury bond holders are forced to exchange their current bonds for new ones with lower interest rates and longer maturities. Many other sovereign states have taken similar measures. Proposals have also been floated to require that retirement accounts such as IRAs and 401(k)s invest in Treasury bonds. That would give the Treasury a guaranteed debt buyer at whatever interest rate they choose to offer. All in the name of "safety" and protecting peoples' retirement accounts from the risks of the stock market of course.

eternalban 9y ago

> he people buying US debt are not dumb. You are right. When presented with offers you can not refuse the smart thing to do is to go along, as a matter of survival. > Since the U.S. is in a superior territorial position and has the advantages of accumulated wealth and knowledge you really have to go out of your way to f--- things up for the U.S. to ever fall out of a leadership position. They really have gone out of their way. I give it 5 years tops and U.S.A. will be given its U.S.S.R. moment. Don't worry, no actual oligarch families will be harmed in this process.

alphaalpha101 9y ago

>Consequently, a "plunge" is very unlikely. More likely is a few more decades of high inflation, which is just a backdoor way to default on pension, social security, and debt obligations, followed by some kind of new stasis. Decades of high inflation? What? The issue is that inflation is low not that it's too high. Unless you're of the generation that thinks that 5% inflation is high...

empath75 9y ago

> has the best natural defenses with no hostile nations on its borders. I think the US is in the middle of a cyberwar with Russia (which it may have already lost) in which physical borders mean very little.

corpMaverick 9y ago
It has become more evident that national security should be focused on strengthen digital security in all its economic entities. i.e. Making sure that every company has good security policies. This is where a lot of damage can be done by an external state actor.

mooreds 9y ago

Agreed. The US is in a tough spot, but the rest of the world is in an even tougher spot. Definitely with regards to geography, but also with regards to demography (the only continent where population is continuing to grow is Africa). Worth reading: "The Accidental Superpower", https://www.amazon.com/Accidental-Superpower-Generation-American-Preeminence/dp/1455583685 https://www.amazon.com/Accidental-Superpower-Generation-Amer...

ac29 9y ago
>the only continent where population is continuing to grow is Africa No, the only continent where population isn't growing is Europe [0], where it is relatively flat. Everywhere else is growing. For individual countries, the only ones with negative growth are in Europe, Islands, and Syria [1]. [0] https://www.statista.com/statistics/270859/natural-rate-of-population-growth-by-continent/ https://www.statista.com/statistics/270859/natural-rate-of-p... [1] https://data.worldbank.org/indicator/SP.POP.GROW?year_high_desc=false https://data.worldbank.org/indicator/SP.POP.GROW?year_high_d...
- toasterlovin 9y ago
  Yeah, but birth rates have fallen below replacement in huge swaths of the world. And Pakistan is the only country outside of Africa that has fertility rates above 3 children per women. Which means that, if the demographic transition continues, the entire world except for Africa will be at below replacement fertility in several decades. Population can continue growing for a while after birth rates fall below replacement, but the writing is on the wall: if Africa can modernize, then the world population will start declining. https://en.wikipedia.org/wiki/Sub-replacement_fertility#/media/File:Countriesbyfertilityrate.svg https://en.wikipedia.org/wiki/Sub-replacement_fertility#/med...
  - mooreds 9y ago
    Thanks to both you and GP for digging up the facts!
    - 9y ago

nradov 9y ago

It's going to be difficult to fully inflate our way out of the coming national debt crisis. When debt service becomes too much of a burden I expect that policy makers will also choose some sort of technical default where Treasury bond holders are forced to exchange their current bonds for new ones with lower interest rates and longer maturities. Many other sovereign states have taken similar measures. Proposals have also been floated to require that retirement accounts such as IRAs and 401(k)s invest in Treasury bonds. That would give the Treasury a guaranteed debt buyer at whatever interest rate they choose to offer. All in the name of "safety" and protecting peoples' retirement accounts from the risks of the stock market of course.