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>2. Political dysfunction could cause the U.S. government to default notwithstanding its ability to print money This risk is likely also going to be true for t
by joshuamorton 8y ago
>2. Political dysfunction could cause the U.S. government to default notwithstanding its ability to print money
This risk is likely also going to be true for the Dollar, so bonds don't carry any more risk than USD in this regard.
- dragonwriter 8y ago> >2. Political dysfunction could cause the U.S. government to default notwithstanding its ability to print money > This risk is likely also going to be true for the Dollar It can't be, because it doesn't apply to the currency, which while it is structurally created by creation of debt is not a debt the government is obligated to pay and on which it can fail and default. > so bonds don't carry any more risk than USD in this regard Even if there was a default risk in the dollar, bonds necessarily have more risk since they are fully exposed to every risk to the currency they are denominated in and also their own default risk, which even if the currency had such a risk would sit on top of it.
- Phlarp 8y agoExcept that if/when political dysfunction does cause a default on the bonds, the currency gets its legs chopped out from under it.
- buttcoinslol 8y agoWhich makes it exceptionally unlikely to happen.. Although Brexit happened, so never say never I guess