To the point about all of the “borrowed money” from China… I say if it ever got bad, I would just tell them “Fuck you, we ain’t paying. If you don’t like it. Come and get it.”
It’s not like they would do anything. They would be left holding a bunch of worthless U.S. paper. Our “standing” would go down in the world… Big Fucking Deal. [/quote]
Brett, crack open a history book and find out what happens to nations that default on their debts. Then ask yourself whether any of these countries would be ones in which you would like to live.
A bankrupt nation is one which, by virtue of its being bankrupt, nobody will trade with, nor extend credit to, because it has demonstrated that it cannot repay its debts. If we defaulted on our debt to China, it would be tantamount to declaring ALL treasury bills worthless, which would result in ALL nations who hold US paper to call their debts. There would be a run on the treasury the likes of which has never been seen. The dollar would be worthless, and the US would be alone against the world.
How long do you think the United States of America, let alone you in your little bunker in Tennessee, could hold out against all the creditor nations of the world, all of them demanding payment for moneys owed? A week? A month? A few years?
Hope you have plenty of food, water, ammunition, silver billion and toilet paper stored in that little bunker. Because if history is a guide, it could get pretty ugly. [/quote]
Didn’t Russia declare bankruptcy in 1998? They seem to be doing fine. Lots of countries seem fine after even worse stuff, such as Germany in 1945 or Japan. [/quote]
Russia in 1998 had an economy that was not tied into the global banking system as inextricably as our own, and they got a massive injection of capital from the IMF and Japan. What sort of position do you imagine the IMF to be in if the US dollar collapses? Plus they could survive on barter until the economy got working again. Could this happen in the United States, outside of a James Wesley Comma Rawles novel?
Germany and Japan in 1945 had a rich uncle named “Sam” to lend them a few bucks until they got back on their feet. Who’s going to bail us out?
And finally, let’s not forget the last time the German economy failed before 1945. The Weimar Republic’s currency crashed within a few years, and pandemonium ensued. We all know what the result of that was.
And yes, Germany got back on its feet in the thirties thanks not only to guns-before-butter policy enacted by the newly-elected Nazi party, but also by a huge infusion of capital from JP Morgan. Again, if the US economy fails and the dollar becomes worthless, who is going to bail us out?