On Wed, Jun 20, 2007 at 10:59:29PM +0530, Udhay Shankar N wrote: > >the chance that the US will not repay debt is negligible. > > In effect, that was my point. Partly, by implying that the threat of
How can the US repay its debt? Why should it do it, it will just default, as all states in the past with fiat currencies did. The state won't go broke, but you can imagine who'll be left holding the bill. > military force (which Cheeni was talking about) against all of the > countries in the list above was, is and will remain infeasible. The US is a paper tiger, unless attacked in the homeland, at which point they'll have to retaliate. > >none of the investors who _can_ cause a depreciation of the dollar > >(e.g. by selling dollar bonds for euro - rather than dollar - > >shares) would do so. they'd lose the most from any rapid depreciation. > > All this necessarily implies is that they wouldn't do anything *rapidly*. When someone starts cutting their losses, everyone else is going to notice, which causes a stampede. Each of the top four could cause it to happen, or lesser partier on the list, assuming they cumulate. The stampede will be very, very rapid. Most will happen in the course of a day, or two, a week tops. > >as for syria moving more trade to the euro, that'll have as much > >impact as a toddler pissing in the ocean. If it was just Syria, it would be that. But once petrodollar becomes petroeuro... or about half a dozen other things trigger the depression. > As another data point out of many, however, it is still of interest. The US is very, very sick, and has been so for a long timer. So far, the dollar as world equivalent of gold standard (I recommend to look to all the countries which used to have metal-backed currencies, and suddenly stopped) has been propping it up. -- Eugen* Leitl <a href="http://leitl.org";>leitl</a> http://leitl.org ______________________________________________________________ ICBM: 48.07100, 11.36820 http://www.ativel.com http://postbiota.org 8B29F6BE: 099D 78BA 2FD3 B014 B08A 7779 75B0 2443 8B29 F6BE
