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Why do governments issue debt that they do not repay? I'm glad someone is out there keeping them honest.
by seibelj 7y ago
Why do governments issue debt that they do not repay? I'm glad someone is out there keeping them honest.
- downrightmike 7y agoDebt is the mechanism that fiat currencies use to create money. If there is no debt, there is no currency. And since we need debt to pay off debt, then you get where we get now with the FED injecting QE and pumping the Repo markets up. The main difference between now and 2008, is that the repo market helps the traders more than the banks. The traders are too big to fail, because if they don't trade and there is no liquidity because Repo fails, there is no stock market. Which destorys the full faith and credit of the USA. Which is what gives money its value. If the Government is not credit worthy, everything falls, look at Japan and their zombie banks and markets. They are no where near their boom.