What happens if US cannot pay it's debt

[Hack-Hook]

It's not about the debt but the ability to repay. United States with AA+ Credit rating, high grade rating, can afford to have the debt while say Pakistan with a rating of B- which is a highly speculative non investment grade, is in a worse position with 200 billion debt.

US government will not default, they will raise the ceiling as high as they want and trust the future. Even if any country were to drop the T bills (say China) the US general public can easily absorb them given their incomes.

the rating that USA gave itself.
USA already can't pay its debt . they just print n=more money and push the consequence of their overextravagant to the rest of the world.

 

[QWECXZ]

US has the luxury of printing Dollars while other countries have to earn money. US will never go Bankrupt.

This works only as long as central banks in the world continue to keep the US dollar as their main reserve, but even this is changing with recent developments like the US overtly using dollar as a weapon against Russia, China, Iran, Syria and Venezuela and the rise of cryptocurrencies and their adoption by countries like Venezuela, El Salvador, Ukraine, etc.

Also, contrary to popular belief, the decline of oil as the main source of energy in future can lead to the collapse of the US dollar dominance as most countries will no longer need to keep the US dollar to trade it for energy (oil) with Arabs and the US.

 

[MH.Yang]

It is not difficult to overthrow the dollar system. USA can print dollars indefinitely, but what if these dollars can't buy enough goods? This will lead to inflation all over the world and will eventually shake and destroy the dollar system. This year, USA printed an additional $3 trillion, leading to global inflation, which is a preview of the collapse of the dollar system. China is the supplier of most goods in the world, can the USA really print dollars indefinitely without China's consent? Yes, eventually China will destroy the dollar system, but is the world ready to give up the dollar?

 

[K_Bin_W]

A picture is worth a 1000 words, This is the future live with it you will sleep easy.

 

[ARMalik]

It is not difficult to overthrow the dollar system. USA can print dollars indefinitely, but what if these dollars can't buy enough goods? This will lead to inflation all over the world and will eventually shake and destroy the dollar system. This year, USA printed an additional $3 trillion, leading to global inflation, which is a preview of the collapse of the dollar system. China is the supplier of most goods in the world, can the USA really print dollars indefinitely without China's consent? Yes, eventually China will destroy the dollar system, but is the world ready to give up the dollar?

TALK ABOUT HYPOCRISY. So then why China is the biggest holder and biggest trader trading in US dollars??? And why is China providing discounts and freebies to the USA while its own citizens have to work hard??? At least EU has bigger balls when they decided to introduce EURO for the EU countries so that they can STOP giving Free Luxury Life to the USA. Admit it - China wants the US dollar to continue on, otherwise if China had that much dignity it would have worked with EU to introduce a new single currency which half the world could use easily.

 

[MH.Yang]

TALK ABOUT HYPOCRISY. So then why China is the biggest holder and biggest trader trading in US dollars??? And why is China providing discounts and freebies to the USA while its own citizens have to work hard??? At least EU has bigger balls when they decided to introduce EURO for the EU countries so that they can STOP giving Free Luxury Life to the USA. Admit it - China wants the US dollar to continue on otherwise if China had that much dignity it would have worked with EU to introduce a new single currency which half the world could use easily.

China can indeed destroy the dollar system by interrupting the supply of goods. But again, is the world ready for the collapse of the dollar system? If the collapse of the dollar system will only bring disaster to the global economy, China will certainly not do so.
It's not hypocrisy, it's responsibility.

 

[ARMalik]

China can indeed destroy the dollar system by interrupting the supply of goods. But again, is the world ready for the collapse of the dollar system? If the collapse of the dollar system will only bring disaster to the global economy, China will certainly not do so.
It's not hypocrisy, it's responsibility.

Collapse of the US Dollar impacts only a handful of Anglo Saxon countries and no one else. So by supporting US Dollar, China is actually supporting these less than 6 countries on the basis of their race.

 

[MH.Yang]

Collapse of the US Dollar impacts only a handful of Anglo Saxon countries and no one else. So by supporting US Dollar, China is actually supporting these less than 6 countries on the basis of their race.

The replacement of the dollar system must be slow and stable, or it will be a global economic disaster. China has the ability to destroy the dollar by cutting off supply, but China will never choose this approach.
Look at Zimbabwe and Venezuela, where inflation led to the collapse of the monetary system. Do you think the biggest loss is their govt? No, it's their people.

 

[Trango Towers]

It's not about the debt but the ability to repay. United States with AA+ Credit rating, high grade rating, can afford to have the debt while say Pakistan with a rating of B- which is a highly speculative non investment grade, is in a worse position with 200 billion debt.

US government will not default, they will raise the ceiling as high as they want and trust the future. Even if any country were to drop the T bills (say China) the US general public can easily absorb them given their incomes.

They said this about Argentina. That's why all the nazis went there.
Eventually you have to repay your debt.
Have you forgotten the scandal involving credit rating agencies like moody not so long ago. They were not checking anything nd giving ratings willy nilly. America is a big lie.

 

[dani191]

usa cant pay its debt she must up intraste rate but then she will deffualt cause she cant pat the intraste rate on thr debt or the pay the debt by print more money if usa want to save here economy she must cat deeply the spending she can start from cancel madicare and medicade and cancel social security

 

[truthseeker2010]

TALK ABOUT HYPOCRISY. So then why China is the biggest holder and biggest trader trading in US dollars??? And why is China providing discounts and freebies to the USA while its own citizens have to work hard??? At least EU has bigger balls when they decided to introduce EURO for the EU countries so that they can STOP giving Free Luxury Life to the USA. Admit it - China wants the US dollar to continue on, otherwise if China had that much dignity it would have worked with EU to introduce a new single currency which half the world could use easily.

Lol, who is actually becoming rich when buying US treasury? China or US?
China is buying US treasury against selling its owns goods, whereas US is just consuming goods on credit. China is biggest trading partner of more than 90% of world's countries with trade balance in its favour. You yourself said China wants US dollar to continue until it wants.

Yeah no. That's a common misconception lapped up by CCP bots. For one, Chinese cannot drop T-bills all at once without making billions in losses just to try and hit at US. Secondly, as long as T Bills are attractive governments are going to buy them up. Take India for example, we accumulated $200 billions worth of UST bills. Imagine when Chinese drops a trillion dollars and the number of countries and institution that is trying to buy that up at a cheaper price.
Third if there is a doomsday scenario where UST bills just vanishes like it's value drops it's going to be trillions of losses to China for one having the largest exposure to T bills.

Note: The entire point of Chinese buying up T bills is because of the trust China has in US economy that it will not fail


I dont dismiss the concern raised. It is a legitimate concern the world will have to face some day. But not today or tomorrow. Who knows what happens 10 years from now. As long as there is trust in the US economy the bubble is not going to burst.

US T is commonly bought against the trade surplus the countries conduct with US. if China sell 1 trillion USD T how will india or other countries buy that 1 trillion USD cash?

 

[dani191]

this is tesla factory in shenghai

and this is in texas should start production in coming mounthes

 

[Cheehg]

USA only cares if they are able to pay interests instead of principal. Just imagine a person maxed out his credit card but only paying minimum payment because nobody is able to bankrupt him.

Lol, who is actually becoming rich when buying US treasury? China or US?
China is buying US treasury against selling its owns goods, whereas US is just consuming goods on credit. China is biggest trading partner of more than 90% of world's countries with trade balance in its favour. You yourself said China wants US dollar to continue until it wants.


US T is commonly bought against the trade surplus the countries conduct with US. if China sell 1 trillion USD T how will india or other countries buy that 1 trillion USD cash?

That's why China rather uses this money on one belt one road projects.

 

[SuvarnaTeja]

This works only as long as central banks in the world continue to keep the US dollar as their main reserve, but even this is changing with recent developments like the US overtly using dollar as a weapon against Russia, China, Iran, Syria and Venezuela and the rise of cryptocurrencies and their adoption by countries like Venezuela, El Salvador, Ukraine, etc.

Also, contrary to popular belief, the decline of oil as the main source of energy in future can lead to the collapse of the US dollar dominance as most countries will no longer need to keep the US dollar to trade it for energy (oil) with Arabs and the US.

All oil is sold in dollars hence everyone needs dollars. Is any OPEC country ready to sell their oil in Renminbi ?

 

[QWECXZ]

All oil is sold in dollars hence everyone needs dollars. Is any OPEC country ready to sell their oil in Renminbi ?

Iran is an OPEC country (in fact, one of its first founders) and one of its major producers and it is already selling its oil in Renminbi to China.
I think Venezuela is probably doing the same as well, but I am not sure.