US could run out of cash as soon as Dec. 15, Janet Yellen warns

[buwaytress]

Though I wonder if 100k usd next year is going to be as valuable as 100k usd now.

Really depends on what you're buying.
Things here are just a mess, a complete mess, prices for energy have skyrocketed, prices for some things like electronics or spare parts the same, some foods again, but others...not really. Meat and vegetables stayed nearly flat, fruits barely moved, transportation costs flat (except if you drive yourself, of course), most services the same, or clothes and health products.
It has a lot to do with what you import, how much of it, and how bad the sector was hit by this.

I only know the situation back home and where I live now, and yeah, I can see prices for basic food items already notching up. I'm not driving but fuel's going to bite in winter anyway, my energy provider went bust, so my long-term contract's out the window and the new provider already is giving me very painful estimates. I don't spend much on luxury or anything else but I do cook almost daily so the markups are quite evident.

I always said jokingly 1 million dollar Bitcoin's actually possible when the US dollar goes to shite but yeah, all this talk of default and US economy and dollar worst-case scenarios won't happen in our lifetime. Not because it's not heading there but because those in charge won't allow it.

[kryptqnick]

It sounds bad, and it might look like the US is in trouble, but I'm with those pointing out that the US will get away with this. No other country could allow it, but given the significance of the USD worldwide and firm economic standing of the US in the world, they'll just print more or do something like that, and who knows, maybe the inflation won't even be that bad as a result because, again, dollar is in such high demand worldwide and so much other fiat relies on it as a reference point of stability, against which other coins' values are measured. One day, it will backfire, but not this time. US is still too powerful. But I do believe that the poor will be affected more than most, of course, and in this sense, it can be devastating for the US even this time around.

[stadus]

The only outcome I see is the increase in inflation.

Increasing their debt ceiling is the result of ineffective management of loans, and yet we still perceive the USA as a powerful nation when they are now struggling with paying their debts. I feel that one country will rule above the USA as in the long run they will not be able to keep their problem and people will lose faith in USD, but anyway, it's good for crypto for sure.

[Abiky]

So we also have record inflation on the cards not just in the US but in most of Europe, and large swathes of the global South.

Inflation, debt and defaulting of the world's biggest economy. That has got to be good for Bitcoin, no? Though I wonder if 100k usd next year is going to be as valuable as 100k usd now.

This is good for Bitcoin, but bad for the global economy. Knowing that the USD is the reserve currency of the world, anything that affects its value (like inflation) will have a negative impact over other countries worldwide. This is not to my surprise, since the pandemic severely affected the American economy. Continuous government spending and money printing will only make matters worse in the long run. Crypto will be put to the test, as the current banking system nears the edge of collapse. Bitcoin "hodlers" will inevitably gain more purchasing power, as the cryptocurrency itself is the antithesis of inflation. Who knows if the decaying global economy opens a path for Bitcoin to become the world's next reserve currency? Just my thoughts

[oHnK]

Even though I'm not a US citizen, I remember very well how Joe Biden's policies were at the beginning after he was sworn in. Several controversial regulations were passed, ranging from taxes to economic stimulus with a very large value as well as a focus on infrastructure development. As at the beginning, I thought that the economic crisis would appear soon, but it has already begun to be realized. The policy solution that can be done is to actually implement a tapering off policy, as well as other contractionary monetary policies.

[sana54210]

The only outcome I see is the increase in inflation.

Increasing their debt ceiling is the result of ineffective management of loans, and yet we still perceive the USA as a powerful nation when they are now struggling with paying their debts. I feel that one country will rule above the USA as in the long run they will not be able to keep their problem and people will lose faith in USD, but anyway, it's good for crypto for sure.

I believe that it is mainly ineffective method of spending the money that they get. They collect so many taxes every single year and in the end they always spend it on the wrong things. For some weird reason, Americans believe that if they are not insanely powerful when it comes to military, then they are going to be doing horrible.

Even the idea of "thanks for your services" to every single soldier they see is a weird one. What service really? The last justified war happened 70 years ago, all the soldiers you see actively working either went to another nation to kill them, or they have been stationed in their nation and did basically nothing, this cost the whole nation probably 20+ trillion dollars in the past 2 decades, probably more. So I am pretty sure if they focused on making their own nation better instead of focusing on killing other nations, maybe they wouldn't be this much in debt.

[sikke]

Hasn't this happened already in the past multiple times?

The fiat system is irretrievably broken and this is just one of the symptoms. It's not the root cause of its issues like Yellen makes it seem.

The more the debt ceiling gets lifted, the more money is going to come into circulation and therefore inflation will pick up. Our only chance is holding cryptos as a hedge.

[fiulpro]

Quite a shocking news, what baffles me is that despite this information being accessible to the governmental bodies, despite the dangers that they were warned about since the time of Trump, they still continue to do things to make the value of not just the dollar or the government, to make the value of the whole country, go down, plus it would be so sudden that any recovery might take a lot of time. US is also loosing a lot of workers, a lot of employees, therefore their economy might not be able to sustain itself.

The debts which are already huge would just increase more and more, what I think is that the financial ministry is not doing their job right, if the government still continue to make these decisions despite them having troubles with printing more money than recommend.

The public debt is already 28.91 trillion more than it has ever been before. Hopefully the government is able to reform their decisions before it's too late.

[Sithara007]

The reptilian overlord Janet Yellen at her best. I laughed quite a lot after hearing about the possibility of the US "running out of cash"... Do you guys know how much cash did they printed in the last 2 years? The M1 monetary supply for US Dollar went up by almost 3 times in the past 2 years. Now she wants to print more money? I am not sure about what happened to the tens of trillions worth of banknotes that were printed during the last two years. All that cash vanished without a trace? And now they are running out of cash?

[Obito]

Pretty scary that they might go into some sort of depression all over again because that kind of debt defaulting will only result with that one thing. I don't see how it's going to affect bitcoin or crypto in general though? I just can't piece it together. Now that I think of it, the lifespan of an empire is around 250 years before a collapse and I think that USA is around 246 years old so...

[wxa7115]

More at source. I trimmed the article down to its most relevant parts.

It appears that a US federal government default is on the table. An event which has reached mythical proportions over the past century. Every year for the past 50+ years people warn the government could default and social security will collapse. This negative sentiment has become so common and widespread that over time americans have come to believe it can never happen. "Social security will fail." Oh but people have been saying it will fail for 50 years and it hasn't. This means social security can never fail.

As time passes and debt grows, our options and safety net for resolving these issues in a positive way, shrink.

If anyone has bright ideas for how these issues might be resolved. Now would be a good time to voice them.

A jump start on what could develop into a full blown crisis might also be a good policy.

It is true that some responsible people have been warning about this possibility for a long time, however the general population and the politicians like always are misinterpreting the signals.

This is similar to when you get sick, at first the symptoms are mild, however you still feel fine and you are not really that affected by the symptoms, but you receive some early warnings from your family members about seeing a doctor but you do not listen, then it gets worse but since it has not killed you and so many other diseases you got did not kill you then you assume this is going to be the case as well, eventually things get even worse and you finally go and see a doctor which tells you it is too late to do anything, you complain of course but the doctor states this could have been easily solved if you went and see them immediately.

This is what is happening with the US economy, since the crash has not happened despite the warnings politicians believe it will never happen, but it will, and the longer the delay the harder the crash.

[Fortify]

More at source. I trimmed the article down to its most relevant parts.

It appears that a US federal government default is on the table. An event which has reached mythical proportions over the past century. Every year for the past 50+ years people warn the government could default and social security will collapse. This negative sentiment has become so common and widespread that over time americans have come to believe it can never happen. "Social security will fail." Oh but people have been saying it will fail for 50 years and it hasn't. This means social security can never fail.

As time passes and debt grows, our options and safety net for resolving these issues in a positive way, shrink.

If anyone has bright ideas for how these issues might be resolved. Now would be a good time to voice them.

A jump start on what could develop into a full blown crisis might also be a good policy.

The silly thing is, the US can print as much money as it likes (within reason) because it has a rather unique power of being the foremost reserve currency of the world and that gives it a lot of perks. If it prints more money it can devalue any debt denominated in US dollars, which of course is what the US government sells to other people all the time. So at present the only thing that would cause this calamity to happen is the grand standing of politicians of both parties who are trying to squeeze various concessions but could great amounts of unnecessary stress to lots of people with these doomsday headlines and both sides trying to weaken the other but never actually solving the problem - which is runaway spending habits, often on useless junk like overly generous military spending.

[davis196]

It sounds bad, and it might look like the US is in trouble, but I'm with those pointing out that the US will get away with this. No other country could allow it, but given the significance of the USD worldwide and firm economic standing of the US in the world, they'll just print more or do something like that, and who knows, maybe the inflation won't even be that bad as a result because, again, dollar is in such high demand worldwide and so much other fiat relies on it as a reference point of stability, against which other coins' values are measured. One day, it will backfire, but not this time. US is still too powerful. But I do believe that the poor will be affected more than most, of course, and in this sense, it can be devastating for the US even this time around.

The US is not in trouble.The US politicians are again creating some drama that nobody needs.
The US debt ceiling debate has become a normal thing,which happens in the end of every year,since the Obama administration,if I remember this correctly.
Both parties will settle some kind of agreement and the debt ceiling will be raised again.I assume that before that agreement,there will be some accusations between both democrats and republicans,so the drama seeking mainstream media can be happy,but there will be a compromise in the end.
The USA cannot go default because they have a money printing machine and US dollar is the global currency.

[Abiky]

Hasn't this happened already in the past multiple times?

The fiat system is irretrievably broken and this is just one of the symptoms. It's not the root cause of its issues like Yellen makes it seem.

The more the debt ceiling gets lifted, the more money is going to come into circulation and therefore inflation will pick up. Our only chance is holding cryptos as a hedge.

Inflation has always been there. But now it's more noticeable due to the negative effects of the pandemic on the global economy. It's up to you to secure your capital by investing into scarce assets like Bitcoin and Gold. Only then, you'll avoid losing purchasing power in the long run. The US Dollar is already losing traction so it should only be a matter of time before another currency replaces it as the world's reserve currency. I'd imagine inflation having a positive effect over Bitcoin's price in the long term. Who knows if prices go higher after Dec 15? Just my thoughts

[justdimin]

The US is not in trouble.The US politicians are again creating some drama that nobody needs.
The US debt ceiling debate has become a normal thing,which happens in the end of every year,since the Obama administration,if I remember this correctly.
Both parties will settle some kind of agreement and the debt ceiling will be raised again.I assume that before that agreement,there will be some accusations between both democrats and republicans,so the drama seeking mainstream media can be happy,but there will be a compromise in the end.
The USA cannot go default because they have a money printing machine and US dollar is the global currency.

This has been the case for as long as I can remember. Creating a situation, a crisis and then asking for your voters to look at it so they would care about it and vote for your party is the key to success over at USA. Platon said (2000 years ago!!!!) "democracy is an education work, without education democracy would turn to oligarchy and if you continue then you will have demagogues and from demagogues you get dictators".

This is something that is still valid today and USA is not a very well educated nation, try to explain to any other nation why they should not have free healthcare with their taxes, try to explain to them why all their taxes should go to military getting new ships with airplanes on it, none of them would vote for you because those people are educated. However in USA saying things like "you can't afford free healthcare, we need to buy more guns!!!" gets you votes. Janet Yellen basically uses the same tactic to divert attention something else.

[dezoel]

Not like USA has ever hit the ceiling, not like they never stopped the government before, not like both Obama and Trump failed to pay government workers for a long period of time just because they couldn't come to an agreement, this would be unique and for the first time right??

Come on guys, Janet is basically trolling right now with how she is acting all innocent and worried and so forth and all she is trying to say is that something bad is about to happen and there is nothing we could stop it, it is bad but we are going to do it anyway because we have to. They will maybe even shut the government down for a while just like how they did it before and then they are going to increase their debt by 10+ more trillion dollars in just 5 years or maybe even quicker and act shocked when the next president needs to increase the ceiling all over again.

[worldofcoins]

Well if we look into the past there were the same Rumours many times but every time there was some way out for all those scenarios.
Unlike in the past, everything will be settled as there wasn't any such situation occurred ever (i.e: entering into new agreements or by some other legislation processes) but please note down that there aren't going to be run out of cash.

[wxa7115]

The US is not in trouble.The US politicians are again creating some drama that nobody needs.
The US debt ceiling debate has become a normal thing,which happens in the end of every year,since the Obama administration,if I remember this correctly.
Both parties will settle some kind of agreement and the debt ceiling will be raised again.I assume that before that agreement,there will be some accusations between both democrats and republicans,so the drama seeking mainstream media can be happy,but there will be a compromise in the end.
The USA cannot go default because they have a money printing machine and US dollar is the global currency.

It is true the US cannot really default on its debts as they can pay with newly printed dollars if they want, however how long can they keep this? Even before the pandemic countries like China and Russia were looking to trade using their own currencies and were avoiding the dollar.

If this continues then more countries will begin to do the same and the hegemony of the dollar could collapse, and if it does the world economy will be in huge problems, this will help bitcoin but at the same time this will probably harden the posture of many governments and they will begin to go against anyone that was cautious enough to put their wealth in a store of value like bitcoin.

[Sithara007]

It is true the US cannot really default on its debts as they can pay with newly printed dollars if they want, however how long can they keep this? Even before the pandemic countries like China and Russia were looking to trade using their own currencies and were avoiding the dollar.

If this continues then more countries will begin to do the same and the hegemony of the dollar could collapse, and if it does the world economy will be in huge problems, this will help bitcoin but at the same time this will probably harden the posture of many governments and they will begin to go against anyone that was cautious enough to put their wealth in a store of value like bitcoin.

As long as USD is the reserve currency of the world, they can go on doing this. And although there have been attempts to use currencies such as Euro and CNY for the global trade, they were met with limited success. It is foolish to assume anyone outside China would be willing to use the CNY, which is perhaps the most manipulated currency in the world. US Dollar is not the best currency, but right now it is more reliable and trustworthy when compared to the other fiats out there such as the CNY, RUR and GBP.

[Abiky]

It is true the US cannot really default on its debts as they can pay with newly printed dollars if they want, however how long can they keep this? Even before the pandemic countries like China and Russia were looking to trade using their own currencies and were avoiding the dollar.

If this continues then more countries will begin to do the same and the hegemony of the dollar could collapse, and if it does the world economy will be in huge problems, this will help bitcoin but at the same time this will probably harden the posture of many governments and they will begin to go against anyone that was cautious enough to put their wealth in a store of value like bitcoin.

I don't think there's reason to panic, especially when the US Dollar enjoys its status as the reserve currency of the world. The United States of America can simply manipulate the economy to its own benefit. Inflation has always been there, but now the situation is worse with the pandemic affecting the global economy. Constant government spending will only increase the debt, greatly affect the value of the US Dollar. Long-term speaking, the US Dollar will fail. But in the short-term, it's highly unlikely that'll happen due to reasons mentioned before. As long as we have Bitcoin, nothing else matters