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What a strange attitude you have, simultaneously ignorant of how sovereign debt ratings work while also dismissing the work of experts in the field.
by CoolGuySteve 3y ago
What a strange attitude you have, simultaneously ignorant of how sovereign debt ratings work while also dismissing the work of experts in the field.
- wyldfire 3y agoI'm pretty sure I don't know any of the work from experts but isn't it incredibly unlikely that the US will be unable or unwilling to pay their debt? And doesn't that form the basis of their rating? asking genuinely because that's the limit of my understanding.
- 0zemp2c 3y agoit isn't ignorance, he's right there is no external context for a buyer of debt to assess value outside of sovereign currencies, which are basically ALL junk for G7 nations the other G7 nations with worse stats all have AAA...its meaningless...if you want to buy G7 debt, you MUST buy toxic waste maybe one day Mars will issue high-quality debt backed by hard assets...until then...
- FredPret 3y agoPlease educate me, oh Cool Guy Steve. Government debt is usually denominated in the currency that government issues. They can print themselves out of debt at any time. At the cost of inflation. And that currency getting devalued against the world's trading currency, the US dollar. So if the country in question has a huge and diversified economy, this is less of an issue. And if the country in question can print more US dollars, and has never defaulted on its debt in centuries, I don't see how they would let that go. The actual risk to an investor in US government debt of not getting paid is zero, unless their name is China and they start WW3. Now, does this mean US government debt is a good investment? That's a different question.
- CoolGuySteve 3y ago> At the cost of inflation. Almost there. Come on, just a bit further.