What happens in a US debt default?

[EdwardBaiamonte]

What are the consequences of a US default?

No one really knows exactly what would happen, but the likelihood is that markets around the world would plunge and global interest rates would rise.

This is because if the US government could not repay the money it owed bondholders, the value of the bonds would decrease. And the yield - the return the government pays to an investor - would rise. This is because it would be perceived as a less safe investment.

This would prompt interest rates around the world, which are often tied to those of US Treasuries, to spike.

Furthermore, the impact on the US's creditors could be dire. Japan, for instance, owns about $1.14 trillion of US debt - which is equivalent to 20% of its annual economic output.

In the US, Goldman Sachs estimates that $175bn would immediately be withdrawn from the US economy and it could lead to a very deep recession.


BBC News - What happens in a US debt default

How does a nation that prints it's own money, default? lol

No, The United States Will Not Go Into A Debt Crisis, Not Now, Not Ever

The reason why it’s not true is because we live in a fiat currency system, where the United States government can create an infinite number of dollars at no cost to meet its obligations. A Treasury bill is a promise that the government will give you US dollars–something that the United States government can produce infinitely and at no cost.

That’s the reason why interest rates on United States debt have only gone down even as the debt has ballooned. That’s the reason why Great Britain has very low rates on its debt despite having very high debt-to-GDP. That’s the reason why Japan has an astounding debt-to-GDP ratio and still enjoys some of the lowest rates ever. Investors have bet for so long that there would be a run on Japanese debt and have ended up so ruined that in financial circles that trade is called “the Widowmaker”


No The United States Will Not Go Into A Debt Crisis Not Now Not Ever - Forbes

Hmm. How does a nation that prints its own money default? Maybe you could ask Russia, Germany, Argentina and Zimbabwe?

I am fairly certain no one was printing their money for them either.

Mark

They the worlds currency? Oil tied to them? lol

NOW think what happened with them???

And? The ONLY thing that protects paper money is the BELIEF that the money will be honored. Once that belief is lost, nothing else matters.

Mark

Is the US currently in that position? lol

liberals have always wanted easy money or liberal printing policies which obviously leads to a lack of belief in money. You can count on liberals to always take the stupid position.

 

[80zephyr]

What are the consequences of a US default?

No one really knows exactly what would happen, but the likelihood is that markets around the world would plunge and global interest rates would rise.

This is because if the US government could not repay the money it owed bondholders, the value of the bonds would decrease. And the yield - the return the government pays to an investor - would rise. This is because it would be perceived as a less safe investment.

This would prompt interest rates around the world, which are often tied to those of US Treasuries, to spike.

Furthermore, the impact on the US's creditors could be dire. Japan, for instance, owns about $1.14 trillion of US debt - which is equivalent to 20% of its annual economic output.

In the US, Goldman Sachs estimates that $175bn would immediately be withdrawn from the US economy and it could lead to a very deep recession.


BBC News - What happens in a US debt default

How does a nation that prints it's own money, default? lol

No, The United States Will Not Go Into A Debt Crisis, Not Now, Not Ever

The reason why it’s not true is because we live in a fiat currency system, where the United States government can create an infinite number of dollars at no cost to meet its obligations. A Treasury bill is a promise that the government will give you US dollars–something that the United States government can produce infinitely and at no cost.

That’s the reason why interest rates on United States debt have only gone down even as the debt has ballooned. That’s the reason why Great Britain has very low rates on its debt despite having very high debt-to-GDP. That’s the reason why Japan has an astounding debt-to-GDP ratio and still enjoys some of the lowest rates ever. Investors have bet for so long that there would be a run on Japanese debt and have ended up so ruined that in financial circles that trade is called “the Widowmaker”


No The United States Will Not Go Into A Debt Crisis Not Now Not Ever - Forbes

Hmm. How does a nation that prints its own money default? Maybe you could ask Russia, Germany, Argentina and Zimbabwe?

I am fairly certain no one was printing their money for them either.

Mark

They the worlds currency? Oil tied to them? lol

NOW think what happened with them???

And? The ONLY thing that protects paper money is the BELIEF that the money will be honored. Once that belief is lost, nothing else matters.

Mark

Is the US currently in that position? lol

Currently? Nope. Its just headed in that direction. But, back to my point. The US cannot keep printing money without serious ramifications.

Mark

 

[EdwardBaiamonte]

[

Currently? Nope. Its just headed in that direction. But, back to my point. The US cannot keep printing money without serious ramifications.

Mark

far far more accurately, its slowing down the presses dramatically, and, how much it prints means little compared to home much of whats printed is circulating.

Do you understand?

 

[Dad2three]

How does a nation that prints it's own money, default? lol

No, The United States Will Not Go Into A Debt Crisis, Not Now, Not Ever

The reason why it’s not true is because we live in a fiat currency system, where the United States government can create an infinite number of dollars at no cost to meet its obligations. A Treasury bill is a promise that the government will give you US dollars–something that the United States government can produce infinitely and at no cost.

That’s the reason why interest rates on United States debt have only gone down even as the debt has ballooned. That’s the reason why Great Britain has very low rates on its debt despite having very high debt-to-GDP. That’s the reason why Japan has an astounding debt-to-GDP ratio and still enjoys some of the lowest rates ever. Investors have bet for so long that there would be a run on Japanese debt and have ended up so ruined that in financial circles that trade is called “the Widowmaker”


No The United States Will Not Go Into A Debt Crisis Not Now Not Ever - Forbes

Hmm. How does a nation that prints its own money default? Maybe you could ask Russia, Germany, Argentina and Zimbabwe?

I am fairly certain no one was printing their money for them either.

Mark

They the worlds currency? Oil tied to them? lol

NOW think what happened with them???

And? The ONLY thing that protects paper money is the BELIEF that the money will be honored. Once that belief is lost, nothing else matters.

Mark

Is the US currently in that position? lol

Currently? Nope. Its just headed in that direction. But, back to my point. The US cannot keep printing money without serious ramifications.

Mark

Heading in that direction? WHEN have conservatives EVER been correct? Name the last policy?

Weird how Clinton/Dem policy had US back up to about 20% of GDP revenues like Carter had US then (like Ronnie) Dubya cut US to 15% of GDP right? I bet you don't think GOP's 'starve the beast' policies helped put US in $17 trillion debt?

 

[Dad2three]

How does a nation that prints it's own money, default? lol

No, The United States Will Not Go Into A Debt Crisis, Not Now, Not Ever

The reason why it’s not true is because we live in a fiat currency system, where the United States government can create an infinite number of dollars at no cost to meet its obligations. A Treasury bill is a promise that the government will give you US dollars–something that the United States government can produce infinitely and at no cost.

That’s the reason why interest rates on United States debt have only gone down even as the debt has ballooned. That’s the reason why Great Britain has very low rates on its debt despite having very high debt-to-GDP. That’s the reason why Japan has an astounding debt-to-GDP ratio and still enjoys some of the lowest rates ever. Investors have bet for so long that there would be a run on Japanese debt and have ended up so ruined that in financial circles that trade is called “the Widowmaker”


No The United States Will Not Go Into A Debt Crisis Not Now Not Ever - Forbes

Hmm. How does a nation that prints its own money default? Maybe you could ask Russia, Germany, Argentina and Zimbabwe?

I am fairly certain no one was printing their money for them either.

Mark

They the worlds currency? Oil tied to them? lol

NOW think what happened with them???

And? The ONLY thing that protects paper money is the BELIEF that the money will be honored. Once that belief is lost, nothing else matters.

Mark

Is the US currently in that position? lol

liberals have always wanted easy money or liberal printing policies which obviously leads to a lack of belief in money. You can count on liberals to always take the stupid position.

More of your low info BS. Shocking how you are NEVER on the correct side of history?

 

[80zephyr]

[

Currently? Nope. Its just headed in that direction. But, back to my point. The US cannot keep printing money without serious ramifications.

Mark

far far more accurately, its slowing down the presses dramatically, and, how much it prints means little compared to home much of whats printed is circulating.

Do you understand?

Of course I understand. More money circulating means the money is worth less.

Mark

 

[80zephyr]

Hmm. How does a nation that prints its own money default? Maybe you could ask Russia, Germany, Argentina and Zimbabwe?

I am fairly certain no one was printing their money for them either.

Mark

They the worlds currency? Oil tied to them? lol

NOW think what happened with them???

And? The ONLY thing that protects paper money is the BELIEF that the money will be honored. Once that belief is lost, nothing else matters.

Mark

Is the US currently in that position? lol

Currently? Nope. Its just headed in that direction. But, back to my point. The US cannot keep printing money without serious ramifications.

Mark

Heading in that direction? WHEN have conservatives EVER been correct? Name the last policy?

Weird how Clinton/Dem policy had US back up to about 20% of GDP revenues like Carter had US then (like Ronnie) Dubya cut US to 15% of GDP right? I bet you don't think GOP's 'starve the beast' policies helped put US in $17 trillion debt?

I personally don't care how it happened. I do care about fixing it. I am also a "dad to three", and I want them to be able to have a good life.

Mark

 

[Toro]

How does a nation that prints it's own money, default? lol

Most nations that have defaulted over the past 100 years have printed their own currency.

 

[EdwardBaiamonte]

I personally don't care how it happened. I do care about fixing it. I am also a "dad to three", and I want them to be able to have a good life.

Mark

a good life spying for with Stalin, Obamacare, and socialism!! Now that is stupid.

 

[EdwardBaiamonte]

Of course I understand. More money circulating means the money is worth less.

Mark

dear, presses print money they don't circulate it. Do you get i tnow?

 

[EdwardBaiamonte]

More of your low info BS. Shocking how you are NEVER on the correct side of history?

so spying for Stalin, electing Obama, and crippling generations with welfare is the correct side of history???
See why we say liberalism is based in pure ignorance.