U.S. debt default unimaginable, creditors say

U.S. debt default unimaginable, creditors say

www.reuters.com

Allowing a brief U.S. debt default to force government spending cuts is a "horrible idea" that could destabilize the world economy and sour already tense relations with big creditors like China, government officials and investors said on Wednesday.

A growing number of Republican lawmakers think a technical debt default might be a price worth paying if it gets the White House to accept deep spending cuts. This idea, once confined to the party's fringe, is seeping into the mainstream.

(visit the link for the full news article)

"How can the U.S. be allowed to default?" said an official at India's central bank. "We don't think this is a possibility because this could then create huge panic globally."

The Republicans' theory is that bondholders would accept a brief delay in interest payments -- maybe a couple of days -- if it meant Washington finally addressed its long-term fiscal problems, putting the country in a stronger position to meet its debt obligations later on.

These people are utterly ignorant. They are playing with fire and I cannot believe this is being openly talked about. They are playing with fire and obviously are too stupid to realize that doing this could cause the world economy to instantly melt-down. The risk the US would be taking by doing so would be extremely irresponsible. Let's hope this won't become a serious option.

On a final note, it is remarkable to note where we stand today. If you would have told someone ten years ago that the US would consider a debt default, he would call you crazy.

www.reuters.com
(visit the link for the full news article)

people need to wake up to the realities of this world and unfortunatly this is one of the few ways it might actually happen. Don't get me wrong I think it would be a horrible, horrible event in world history but I kinda lean to the view that it needs to happen before people actually start doing anything about the state of their government.

reply to post by Mdv2


In reality all they are doing is messing around with the definition of "DEFAULT"...

IMO, call it what you want, the US is broke and there's no way to fix it with the current system...

The US will default. Not because the debt ceiling wasnt raised. Not because we refuse to pay. No, because it was designed to happen. The dollar, and with it our nation, will fall, because of the inability of the American people to stand up for their republic. But let me guess, "It was all a conspiracy" wasnt it? The world has already chosen their new reserve currency. As soon as the US defaults nations around the world will dump the dollar. The entire world market will be flooded and the US dollar will be dead overnight.

Does this mean no more Lady Gaga? Orrrr maybe no more MTV? No more Jack Ass movies? Hummm or how about Halo? Might be not so bad after all

Originally posted by Mdv2


[

On a final note, it is remarkable to note where we stand today. If you would have told someone ten years ago that the US would consider a debt default, he would call you crazy.

I think your wrong saying this is not an option. Countries have defaulted on there debt before it can happen again. I have been saying default is what is going to happen fifteen years ago, to me it is only a matter of when. Yes it will cause a global melt down, and yes the economies will recover.

Originally posted by balon0
Does this mean no more Lady Gaga? Orrrr maybe no more MTV? No more Jack Ass movies? Hummm or how about Halo? Might be not so bad after all

If and when we lose our status as world reserve currency gas prices would skyrocket. If the world dumped the dollar all at one time due to the default (which is very possible) and the world market does indeed become flooded with US dollars it would indeed kill the US dollar overnight. $500 for bread would be the norm.

MTV? Try NO TV.

Originally posted by RedGolem

Originally posted by Mdv2


[

On a final note, it is remarkable to note where we stand today. If you would have told someone ten years ago that the US would consider a debt default, he would call you crazy.

I think your wrong saying this is not an option. Countries have defaulted on there debt before it can happen again. I have been saying default is what is going to happen fifteen years ago, to me it is only a matter of when. Yes it will cause a global melt down, and yes the economies will recover.

And which of those countires held the status of world reserve currency? The last time this happend was with Britian and we were there to catch them from their fall. Thats how we obtained our status and the only reason they're our ally... lest you forget they're our 'natural' enemy.

All of us KNOW something is wrong with our government and the world's governments. Why are they running us into the ground? You can feel it. Stop wasting your time blaming the Parties and start looking at the ones who hold the most power and control. I don't care if you have a religious bone in your body or not, please take a little time to read each of the articles at www.cuttingedge.org... If you are not religious in the least, it doesn't matter at this moment. Read it and blank out the religious bits for all i care. It's the information contained within the site that you need to read. Please just read Part 1 for me. Suspend your disbelief for 10 minutes. Please just read it. And if it answers your questions as to what is going on, ask as many people as you know to read it. As stated, at this point we need as many people in the USA to at least begin to believe that there are truly horrible people in this world that have brought us to this point in time. Let's try to do something about it. Thank you.

reply to post by e11888


e11
I am not familiar with the U.K. default, but I do remember the Russian default in 98. I don't the the figures, but Russia is a large country with wealth in natural resources. So a default can happen any where.
Russia default
As to the global currency angel yes that be argued but also the Euro has been moving in to take that place. The main reason I say that is it is so widely accepted around the world.

Originally posted by RedGolem
reply to post by e11888

 

e11
I am not familiar with the U.K. default, but I do remember the Russian default in 98. I don't the the figures, but Russia is a large country with wealth in natural resources. So a default can happen any where.
Russia default
As to the global currency angel yes that be argued but also the Euro has been moving in to take that place. The main reason I say that is it is so widely accepted around the world.

See but thats just the thing, The US has no wealth. Our economy is flatlining as our jobs are being shipped overseas thanks to our Government. The problem here is that we trulely do rely on our status as world reserve currency because its one of the only things keeping our nation going. Without that status, the world stops purchasing oil in US dollars. Overnight our gas prices go from $4-9 and as a result rapid inflation occurs.

Now yes, normally any country could deal with this issue. But when you mix that with the scare tactic that is what could happen as a result of our default you begin to see a very scary picture unfold.

The US defaults on their debt and as a result the world drops the US dollar like a hot cake all at once. This in turn floods the world market with US dollars making them literally worthless overnight. As a result, the US dollar is obviously dropped as the world reserve currency. Now not only does our dollar have no buying power, but inflation makes its imposible to do absolutely anything. At this point we literally sit there and wait for China to come over and forcefully retake what is theirs.

The Republicans obviously would want this since it would make the Obama administration look bad before the elections. Actually a miraculous savior QE3 this fall wouldn't be much fairer. The former action would put a solid double bottom to the economic recession and the latter would inflate the economy to new higher debt levels.

Originally posted by Bordon81
The Republicans obviously would want this since it would make the Obama administration look bad before the elections. Actually a miraculous savior QE3 this fall wouldn't be much fairer. The former action would put a solid double bottom to the economic recession and the latter would inflate the economy to new higher debt levels.

edit on 8-6-2011 by Bordon81 because: (no reason given)

You obvliously still cant see the fact that both parties are run by the same interests.

Ill just go over here and stand on my soap box and play my fiddle as rome burns.

reply to post by e11888


E11
yes if a default happens and all the countries in the world dump there U.S. dollars the value would crash. However the first point is the U.S. still does have a strong GDP. The ranking in the world is number two behind only the E.U. Of the GDP 22 percent is industrial. In times past when the U.S. currency falls other nations have stepped in to purchase the currency to keep it valued higher on the world market. That has been done so it is still easier to make goods in there respective countries and sell them in the U.S. as opposed to the other way around. So if the U.S. dollar crashes the cost for other countries to purchases goods made in the U.S. will be very low making industry in the U.S. go on the rise. Because of that other industrial countries will move to reduce the effects of that happening as much as they can because it is in there own best intrust. The economies of the world would all crash as what happened when Russia defaulted but they can still recover.

Originally posted by RedGolem
reply to post by e11888

 

E11
yes if a default happens and all the countries in the world dump there U.S. dollars the value would crash. However the first point to not is the U.S. still have a strong GDP. The ranking in the world is number two behind only the E.U. Of the GDP 22 percent is industrial. In times past when the U.S. currency falls other nations have stepped in to purchase the currency to keep it valued higher on the world market. That has been done so it is still easier to make goods in there respective countries and sell them in the U.S. as opposed to the other way around. So if the U.S. dollar crashes the cost for other countries to purchases goods made in the U.S. will be very low making industry in the U.S. go on the rise. Because of that other industrial countries will move to reduce the effects of that happening as much as they can because it is in there own best intrust. The economies of the world would all crash as what happened when Russia defaulted but they can still recover.

Unless the opportunity to put the 'nail in coffin' would arrise? I dont see how US GDP is that high. It cannot be possible with unemployment as high as it is.

most of the debt is owed to people and institutions in american with social security being one of the biggest creditors. my bet is that they won't default on china and japan and the like, they will default on their own people.....
while borrowing billions to help the arab nations!
that's just the american way!!!

reply to post by e11888


e11
The figures im using are from 2010. Yes there are plenty of countries and groups out there who want to see the U.S. no longer exist. I just don't think it would be worth it for another nation to use the fall of the economy to make a move to take over in a military way. They would move to take over the economy, yes with out a doubt.
I am sure you can argue the legitimacy of the numbers but if you want to look more into it hear they are.

I think this is more about America stating where the power lies...

This is a power tell.

It's not a freaking default.

The US still brings in more taxpayers money then it costs in interest on the debt, therefore, NOT A DEFAULT. Well not to foreign creditors at least.

But it will be a default to : military contractors/veteran pensions/medicare/medicaid/social security people who were told they would be paid... but eh, it's not like they are real people... right?

If you are in this category, you are screwed either way :

Default : no money for you.
Not default but massive cuts : no money for you.

Cut deficit to 0 and the 2008 recession will look like happy times. The GDP will crash 12-15% in the first year. If you remember, the 2008 recession ``crashed`` the GDP by about 3%.... so now imagine it, 4-5 times as bad... and people are in even worse shape now than in 2008... and you get yourself a big big big big problem.

The end game is fast fast fast approaching...