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The difference between the US and Zimbabwe is that if the US had a civil war and inflation ruined the currency, it would send the world into the second dark age

The difference between the US and Zimbabwe is that if the US had a civil war and inflation ruined the currency, it would send the world into the second dark ages. Civil wars cant happen in the US? thats good to know, but i wont take your (implied) word for it. What about if China suddenly asked for something in exchange for the tons of american paper currency they have accumulated? It is unlikely anytime soon, but they will only take it as long as it has value. So the more you inflate, the more you have to send to China to maintain the American lifestyle. Our economy is becoming less rugged over time. A large shock becomes more and more likely to significantly disrupt our system. There is no redundancy or backup operations. Our cpu core's are all at 120% load. <sarc>Also, its a good thing that stuff like population pressure and infectious diseases are a thing of the past (two of histories best methods for shocking a political/economic systems). You know, because the global population is under control and our climate is capable of withstanding everything we throw at it with complete aplomb. </sarc> However when everything is going well, Keynesianism works well. I will give it that.

parasubvert 13y ago
I did not imply civil wars can't happen in the USA. I said that its not happening right now. China does not own that much American debt, and has not been accumulating in the past few years. They have maybe 1.2 trillion out of the 15 trillion: http://en.m.wikipedia.org/wiki/National_debt_of_the_United_States http://en.m.wikipedia.org/wiki/National_debt_of_the_United_S... China moving away from US currency implies they don't want to trade with us - unlikely. But if they did do this, they'd sell the currency on the global market, the cost of the dollar would go down, and US exports would likely boom due to increased competitiveness. In other words, it remains in China's interests to keep their US reserves. And in everyone's interest -- as far as the numbers show, the safest asset on earth (as crazy as it sounds) is US government debt.

parasubvert 13y ago

I did not imply civil wars can't happen in the USA. I said that its not happening right now. China does not own that much American debt, and has not been accumulating in the past few years. They have maybe 1.2 trillion out of the 15 trillion: http://en.m.wikipedia.org/wiki/National_debt_of_the_United_States http://en.m.wikipedia.org/wiki/National_debt_of_the_United_S... China moving away from US currency implies they don't want to trade with us - unlikely. But if they did do this, they'd sell the currency on the global market, the cost of the dollar would go down, and US exports would likely boom due to increased competitiveness. In other words, it remains in China's interests to keep their US reserves. And in everyone's interest -- as far as the numbers show, the safest asset on earth (as crazy as it sounds) is US government debt.