US Debt Has Exploded

[Laosai]

Yeah but you forget something.

See in our peaceful world, people tend to think that money is power.
What they forget, is that money isn't power, military power is power.

Yes we're in debt, and so?
Imagine tomorrow EU and USA say "ok sorry we don't want to repay, you've earned far enough with the decades of interest we already paid so now we say stop and won't pay anything more".

What would happen?

Hahaha keep dreaming.

The elite are so greedy that they would put people in  labour camps to pay back the debt before that would happen.

Are you unemployed? No problem, off to the gulag with you.

Thats the dark future we are looking ahead to

Oh yeah that's another possibility.
I meant that the country won't go bankrupt, that's for sure, even if it would well... What would happen? Nothing.

But yeah they may totally use the "debt excuse" in order to force the people to die at work.
That's why liberalism and capitalism without control by the state is shit. You can't but see the people having money gathering more and more money and more and more power... What a marvelous system.

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[botany]

Oh yeah that's another possibility.
I meant that the country won't go bankrupt, that's for sure, even if it would well... What would happen? Nothing.

Nothing? The US would never be able to borrow again at current rates and the dollar would cease to be the international reserve currency

[yugo23]

Oh yeah that's another possibility.
I meant that the country won't go bankrupt, that's for sure, even if it would well... What would happen? Nothing.

Nothing? The US would never be able to borrow again at current rates and the dollar would cease to be the international reserve currency

Yeah for sure. And what would they do with their money? Where would they invest?

And dude what you say is completely false. It's not because everybody know what a ponzi is that nobody invests in a ponzi.

There will always be someone to invest in USA. Just because those who already lent to the USA have already ROI 6 times guy!

[Barnabe]

Yeah but you forget something.

See in our peaceful world, people tend to think that money is power.
What they forget, is that money isn't power, military power is power.

Yes we're in debt, and so?
Imagine tomorrow EU and USA say "ok sorry we don't want to repay, you've earned far enough with the decades of interest we already paid so now we say stop and won't pay anything more".

What would happen?

All other countries stop exporting to EU and US, a lot of people die from hunger of lack of other goods. And the other countries would also stop repaying which means that a lot of actives in occident (retirement funds, investment funds and so on) would be worth a lot less.

IMO military is dependant on economy, not the opposite.

[onlinedragon]

THe world economy depends to much on that from the VS. The dept is really high but so far that was never a problem to just press more money.

[Barnabe]

THe world economy depends to much on that from the VS. The dept is really high but so far that was never a problem to just press more money.

But do you think it should continue this way ?
The US has been printing *a lot* of money the last few years. They are trying to export little by little their debt to the world.
A lot of people are noticing this more and more, if they think it's not profitable anymore (or that holding US dollars is too expensive [because if loses value every year]) the US dollar could crash really fast.

[yugo23]

THe world economy depends to much on that from the VS. The dept is really high but so far that was never a problem to just press more money.

But do you think it should continue this way ?
The US has been printing *a lot* of money the last few years. They are trying to export little by little their debt to the world.
A lot of people are noticing this more and more, if they think it's not profitable anymore (or that holding US dollars is too expensive [because if loses value every year]) the US dollar could crash really fast.

Bah, just got to print a USD2 with this simple calculation that USD2 = 10000000 USD.
Then you print a bit of money and it all goes smooth xD

[yugo23]

Yeah but you forget something.

See in our peaceful world, people tend to think that money is power.
What they forget, is that money isn't power, military power is power.

Yes we're in debt, and so?
Imagine tomorrow EU and USA say "ok sorry we don't want to repay, you've earned far enough with the decades of interest we already paid so now we say stop and won't pay anything more".

What would happen?

All other countries stop exporting to EU and US, a lot of people die from hunger of lack of other goods. And the other countries would also stop repaying which means that a lot of actives in occident (retirement funds, investment funds and so on) would be worth a lot less.

IMO military is dependant on economy, not the opposite.

Yeah sure, and where would they export if they stop exporting to EU and US?

And by the way, EU and US produce enough food for themselves.
Oh sure we would have less Nutella, but die from hunger? I don't think so.
And we wouldn't have Iphone anymore but is it really mandatory?

I'd say it would even clean our way of life a lot. Go back to the basis. Food, energy and internet. That's enough!
It would also completly stop the unemployment in US and EU

[RealBitcoin]

THe world economy depends to much on that from the VS. The dept is really high but so far that was never a problem to just press more money.

But do you think it should continue this way ?
The US has been printing *a lot* of money the last few years. They are trying to export little by little their debt to the world.
A lot of people are noticing this more and more, if they think it's not profitable anymore (or that holding US dollars is too expensive [because if loses value every year]) the US dollar could crash really fast.

Bah, just got to print a USD2 with this simple calculation that USD2 = 10000000 USD.
Then you print a bit of money and it all goes smooth xD

Dont rename it, because then people realize that its devalued.

Devalue it, and cut the zeroes, but dont rename the currency, that way you can fool the people continuously.

[Barnabe]

Yeah but you forget something.

See in our peaceful world, people tend to think that money is power.
What they forget, is that money isn't power, military power is power.

Yes we're in debt, and so?
Imagine tomorrow EU and USA say "ok sorry we don't want to repay, you've earned far enough with the decades of interest we already paid so now we say stop and won't pay anything more".

What would happen?

All other countries stop exporting to EU and US, a lot of people die from hunger of lack of other goods. And the other countries would also stop repaying which means that a lot of actives in occident (retirement funds, investment funds and so on) would be worth a lot less.

IMO military is dependant on economy, not the opposite.

Yeah sure, and where would they export if they stop exporting to EU and US?

And by the way, EU and US produce enough food for themselves.
Oh sure we would have less Nutella, but die from hunger? I don't think so.
And we wouldn't have Iphone anymore but is it really mandatory?

I'd say it would even clean our way of life a lot. Go back to the basis. Food, energy and internet. That's enough!
It would also completly stop the unemployment in US and EU

With the actual consumption of Europe and US I doubt they could produce enough food (I couldn't find any number though), but I guess if habits change and for instance meat consumption lowers it could be possible.

And maybe we even couldn't have internet...
In Europe there is no uranium production and there is not enough oil to keep our cars going, we are highly dependent on importations.
Iphones is just a small anecdote, but we wouldn't have any asphalt, iron, steel, aluminum, rare earths (and a lot of other elements), machinery, textiles and so on.
It would take decades to develop these sectors again, in the meanwhile a lot of people would die and life conditions would decay very quickly.

[Barnabe]

THe world economy depends to much on that from the VS. The dept is really high but so far that was never a problem to just press more money.

But do you think it should continue this way ?
The US has been printing *a lot* of money the last few years. They are trying to export little by little their debt to the world.
A lot of people are noticing this more and more, if they think it's not profitable anymore (or that holding US dollars is too expensive [because if loses value every year]) the US dollar could crash really fast.

Bah, just got to print a USD2 with this simple calculation that USD2 = 10000000 USD.
Then you print a bit of money and it all goes smooth xD

Dont rename it, because then people realize that its devalued.

Devalue it, and cut the zeroes, but dont rename the currency, that way you can fool the people continuously.

That's what Brazil did for years, it works for a while, but you can't fool everybody like this forever. After some time people notice fiat money is useless and use other means to store value (gold or silver for instance)

[pitham1]

THe world economy depends to much on that from the VS. The dept is really high but so far that was never a problem to just press more money.

But do you think it should continue this way ?
The US has been printing *a lot* of money the last few years. They are trying to export little by little their debt to the world.
A lot of people are noticing this more and more, if they think it's not profitable anymore (or that holding US dollars is too expensive [because if loses value every year]) the US dollar could crash really fast.

Bah, just got to print a USD2 with this simple calculation that USD2 = 10000000 USD.
Then you print a bit of money and it all goes smooth xD

Dont rename it, because then people realize that its devalued.

Devalue it, and cut the zeroes, but dont rename the currency, that way you can fool the people continuously.

You create confusion and then people decide not to hold your worthless paper.
They would rather hold gold.

[Denker]

THe world economy depends to much on that from the VS. The dept is really high but so far that was never a problem to just press more money.

But do you think it should continue this way ?
The US has been printing *a lot* of money the last few years. They are trying to export little by little their debt to the world.
A lot of people are noticing this more and more, if they think it's not profitable anymore (or that holding US dollars is too expensive [because if loses value every year]) the US dollar could crash really fast.

Bah, just got to print a USD2 with this simple calculation that USD2 = 10000000 USD.
Then you print a bit of money and it all goes smooth xD

Dont rename it, because then people realize that its devalued.

Devalue it, and cut the zeroes, but dont rename the currency, that way you can fool the people continuously.

You create confusion and then people decide not to hold your worthless paper.
They would rather hold gold.

Either that or they start to accept and use a more stable foreign currency.
Or they simply switch over to barter again when possible.
Also cigarettes could be used as kind of a currency.

[Preclus]

Let's say you have two people.

One has no debt and earns $100,000 a year.

A second doesn't work but has $10MM in debt. They used that money to buy commercial properties that bring in $800,000 a year in income (8% cap rate). They pay a debt rate of 3.5% so after debt payments, they net $450,000 (before tax).

Debt is not inherently a bad thing.

[Preclus]

You create confusion and then people decide not to hold your worthless paper.
They would rather hold gold.

Nobody holds US dollars. People hold:

- land
- houses
- public stock
- bonds
- private equity investments (private stock)
- bank deposits (these are not dollars, they are loans to the bank)
- CDs
- beenie babies

And, in fact, many people are short the US dollar. They bought a house with a mortgage. They spent money they didn't have to buy a house, they borrowed it from a bank.

And by doing so, they went short the dollar. If you have a $500,000 mortgage and a $1MM house, you are short the dollar to the tune of $500,000. You are hoping the value of the dollar goes down over time again your house value. It is a leveraged bet on real estate.

In that situation, they not only have no dollars, they are short (negative) dollars.

Nobody holds dollars. Dollars are not an investment. Dollars are a means of exchange. They are what things are priced in. Thinking about the value of something vs. the value of the dollar doesn't even make sense. A dollar is worth a dollar, year after year. It is not an investment.

[Betwrong]

THe world economy depends to much on that from the VS. The dept is really high but so far that was never a problem to just press more money.

But do you think it should continue this way ?
The US has been printing *a lot* of money the last few years. They are trying to export little by little their debt to the world.
A lot of people are noticing this more and more, if they think it's not profitable anymore (or that holding US dollars is too expensive [because if loses value every year]) the US dollar could crash really fast.

Bah, just got to print a USD2 with this simple calculation that USD2 = 10000000 USD.
Then you print a bit of money and it all goes smooth xD

Ammm, not really. Remember Zimbabwe when they printed their trillions notes. That didn't help them much.



IMO USA is very far from this point actually. They don't print dollars without thinking about how much exactly they should print, that's why the inflation is not as big as in some other countries.

[markj113]

IMO USA is very far from this point actually. They don't print dollars without thinking about how much exactly they should print, that's why the inflation is not as big as in some other countries.

Really?

I thought every year they just have a pretend argument over the debt ceiling then increase it just enough to last them until the following year where they increase the debt ceiling again in a never ending spiral of hopeless unpayable debt.

[Barnabe]

You create confusion and then people decide not to hold your worthless paper.
They would rather hold gold.

Nobody holds US dollars. People hold:

- land
- houses
- public stock
- bonds
- private equity investments (private stock)
- bank deposits (these are not dollars, they are loans to the bank)
- CDs
- beenie babies

And, in fact, many people are short the US dollar. They bought a house with a mortgage. They spent money they didn't have to buy a house, they borrowed it from a bank.

And by doing so, they went short the dollar. If you have a $500,000 mortgage and a $1MM house, you are short the dollar to the tune of $500,000. You are hoping the value of the dollar goes down over time again your house value. It is a leveraged bet on real estate.

In that situation, they not only have no dollars, they are short (negative) dollars.

Nobody holds dollars. Dollars are not an investment. Dollars are a means of exchange. They are what things are priced in. Thinking about the value of something vs. the value of the dollar doesn't even make sense. A dollar is worth a dollar, year after year. It is not an investment.

That's an interesting view on the situation, but a bit incorrect in my opinion.
Right now Oil is negotiated in US dollars, which means that each time Oil is traded they have to convert it to USD. If the seller doesn't need the money right after it he can keep the USD (it will be useful in a future transaction). This creates an artificial offer for USD, thus increasing the price of it. In this case, even if the USD is only a way to exchange value, the currency benefits from it.

Bonds can also be correlated to a currency, for instance a few years ago when Japan was hit by the "Fukushima tsunami" the value of Yen increased simply because companies sold their foreign holdings so they could have cash to pay for damages.

[Laosai]

THe world economy depends to much on that from the VS. The dept is really high but so far that was never a problem to just press more money.

But do you think it should continue this way ?
The US has been printing *a lot* of money the last few years. They are trying to export little by little their debt to the world.
A lot of people are noticing this more and more, if they think it's not profitable anymore (or that holding US dollars is too expensive [because if loses value every year]) the US dollar could crash really fast.

Bah, just got to print a USD2 with this simple calculation that USD2 = 10000000 USD.
Then you print a bit of money and it all goes smooth xD

Ammm, not really. Remember Zimbabwe when they printed their trillions notes. That didn't help them much.



IMO USA is very far from this point actually. They don't print dollars without thinking about how much exactly they should print, that's why the inflation is not as big as in some other countries.

Difference is Zimbabwe debt was in USD whereas USA debt is in... USD ^^

So if they print 10000000000 USD bils they'll just repay it with a few bills. It will automatically decrease the value of the debt in fact =)

[markj113]

You cant just keep printing yourself out of debt with nothing to back the new currency generated.

Ultimately it just waters down the currency value and ends in hyperinflation.