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What happens if US cannot pay it's debt

Chhatrapati

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Pakistani debt is about 200 billion for reference.
It's not about the debt but the ability to repay. United States with AA+ Credit rating, high grade rating, can afford to have the debt while say Pakistan with a rating of B- which is a highly speculative non investment grade, is in a worse position with 200 billion debt.

US government will not default, they will raise the ceiling as high as they want and trust the future. Even if any country were to drop the T bills (say China) the US general public can easily absorb them given their incomes.
 

Ahmet Pasha

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It's not about the debt but the ability to repay. United States with AA+ Credit rating, high grade rating, can afford to have the debt while say Pakistan with a rating of B- which is a highly speculative non investment grade, is in a worse position with 200 billion debt.

US government will not default, they will raise the ceiling as high as they want and trust the future. Even if any country were to drop the T bills (say China) the US general public can easily absorb them given their incomes.
But if you look at this with deeper skepticism it all seems like a system running on hot air and artificiality.
 

truthseeker2010

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It's not about the debt but the ability to repay. United States with AA+ Credit rating, high grade rating, can afford to have the debt while say Pakistan with a rating of B- which is a highly speculative non investment grade, is in a worse position with 200 billion debt.

US government will not default, they will raise the ceiling as high as they want and trust the future. Even if any country were to drop the T bills (say China) the US general public can easily absorb them given their incomes.
If china dropped its T-bill holding, it would be death of US Dollar as main reserve currency and hyperinflation in US. The american public is already under pressure due to high inflation, and you think they would be able manage hyperinflation?
But if you look at this with deeper skepticism it all seems like a system running on hot air and artificiality.
Yes its fed printing which is keeping US economy afloat.
 

Chhatrapati

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If china dropped its T-bill holding, it would be death of US Dollar as main reserve currency and hyperinflation in US. The american public is already under pressure due to high inflation, and you think they would be able manage hyperinflation?
Yeah no. That's a common misconception lapped up by CCP bots. For one, Chinese cannot drop T-bills all at once without making billions in losses just to try and hit at US. Secondly, as long as T Bills are attractive governments are going to buy them up. Take India for example, we accumulated $200 billions worth of UST bills. Imagine when Chinese drops a trillion dollars and the number of countries and institution that is trying to buy that up at a cheaper price.
Third if there is a doomsday scenario where UST bills just vanishes like it's value drops it's going to be trillions of losses to China for one having the largest exposure to T bills.

Note: The entire point of Chinese buying up T bills is because of the trust China has in US economy that it will not fail😂

But if you look at this with deeper skepticism it all seems like a system running on hot air and artificiality.
I dont dismiss the concern raised. It is a legitimate concern the world will have to face some day. But not today or tomorrow. Who knows what happens 10 years from now. As long as there is trust in the US economy the bubble is not going to burst.
 

AZADPAKISTAN2009

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USA invented the Manipulation Tool , the people who loan to USA and world make the rules
around loans and financial assistance.

My core feeling is while USA has massive debt , unimaginably yuge , however the impact for debt is passed to smaller countries with manipulation of Dollar based currency exchange system and manipulation in oil and Petrol prices


US currency vs Foreign Nation's Currency Exchange rate
US currency vs Foreign Nation's Currency Exchange rate
US currency vs Foreign Nation's Currency exchange rate

US Current Strength / Interest figures manipulate oil and futures markets (Impacts Oil Producing Nation's economy)

The Mega Franchise Network , spread world wide also deposit a Huge Chunk of Income Monthly , in form of Franchise fees
and Profits even when the burger is cooked similarly to any other burger or pizza

The problem really is the Poor Nation's currency it seems never seems to Rise , even if US debt is 1000 times more them them , something seems illogical . The common perception of debt does not seems to impact USA at least as long as the rule makers continue to write up loans for Government


USA and Russia are always in constant battle , to control oil and gas prices and who should buy or sell gas/oil in order to minimize each other's influence
 
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Wood

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It's not about the debt but the ability to repay. United States with AA+ Credit rating, high grade rating, can afford to have the debt while say Pakistan with a rating of B- which is a highly speculative non investment grade, is in a worse position with 200 billion debt.

US government will not default, they will raise the ceiling as high as they want and trust the future. Even if any country were to drop the T bills (say China) the US general public can easily absorb them given their incomes.
Abruptly dumping US T-bills would mean that you'll devalue your own external reserves. Gradual release will just get absorbed over a period of time. But it will most likely become a problem for Fed to raise new debt for a while.
 

Chhatrapati

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Abruptly dumping US T-bills would mean that you'll devalue your own external reserves. Gradual release will just get absorbed over a period of time. But it will most likely become a problem for Fed to raise new debt for a while.
The issue of dropping UST is just imaginary. So I had to be creative. Realistically without a major US economic down turn and crisis there is no scenario China would drop UST without making a loss for no apparent reason. They can gradually liquidate it but very gradually like say in 5 years.

Also no, that will not affect the US from raising new debts. That again depends on their rating.
 

BHAN85

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China has more interests in sustain dollar than USA iself.

Chinese ruling elite couldn't live without USA luxuries products.
 

cloud4000

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The day the US can't pay its debt is the day the US dollar will cease to be the world's reserve currency. A country's currency is an indicator of reliability, trustworthiness, and credibility. If you don't have them, no one will demand your country's currency but someone they trust and rely upon.
 
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It is not about if or when... the rest of the combined world has committed itself in keeping the house of cards afloat... thereby providing the legitimacy to the system and their position as serfs... which is why there is a productivity bubble... East Asian economies that provide the productivity and services lend this system it's credence, the energy producers make all in short supply, willing or unwilling underwriters.
The fact that all want to line up to be production centers of endless product says it all... the blindfold is on...
System depends on continuous uninterrupted supply and consumption. It is designed to favor the haves!!!
Ride it out till either the consumption or production gives... the rest will be as we say history.
 

ARMalik

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It amazes me that STILL most of YOU do not understand that ALL THIS MODERN DAY FINANCIAL SYSTEM since the end of WW-2 was INSTALLED BY THE USA with the US DOLLAR as RESERVE CURRENCY BEING THE CORNER-STONE of this system. All Banks, Financial institutions IMF/World Bank, Hedge Funds, Stock Market systems, Credit Rating Agencies and Systems like AA/BB, etc. ALL BELONG TO THE USA system imposed after WW-2.

WHY THE HELL YOU STILL DON'T UNDERSTAND THIS BASIC stuff is beyond belief. US debt ceiling is just a Political Drama for idiotic masses aka idiotic sheep and cows.

Until the US Dollar Remains the Reserve Currency, no one can do anything. And the BIGGEST CULPRITS who support the US Dollar are actually the Chinese ! No Shi.t ! SO while the rest of the World has to work hard, the US simply prints more dollars out of its arse and enjoys life thanks to the Chinese, Japanese and the Arabs for providing free life to the USA !
 

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