Will US become a defaulter ?

[Jade]

In short term no, but in the long run, if things goes this way...yes ...US is going to be a defaulter. Already the Debt/GDP ratio is 93% and there are slim chances that this ratio is going to come down in near future.

The expansionary fiscal policy of the US government is not going to work. The Iraq and Afghan wars, bailing out companies during credit crisis have deepened the fiscal deficit

 

[Sugarcane]

In short term no, but in the long run, if things goes this way...yes ...US is going to be a defaulter. Already the Debt/GDP ratio is 93% and there are slim chances that this ratio is going to come down in near future.

The expansionary fiscal policy of the US government is not going to work. The Iraq and Afghan wars, bailing out companies during credit crisis have deepened the fiscal deficit

Here comes a rare realistic Indian

 

[Juice]

US Market will be largest in the world but not for us because we ask for trade they give aid. So, no tension for PAK. and highest number of companies in fortune 500 will fall eventually with the fall of economy.

Controlling oil supplies is the monopoly of USZ, If $ lose its confidence eventually it will leads to start Oil trade in other currency. Like Qadafi wants to trade his oil in gold coins, Sadam was also trying same kind of things. DSK - was purposing other currencies as reserve as well and we know what happened to them.

Biggest army????? How they well afford.

BTW... If you allow any country to print currency and start accepting it, he will be ultimately having all those things which you have mentioned. even Somalia

You are correct, mutual trade would benefit both far more than aid...wich I agree, most likely at least half ends up in Switzerland.

 

[Sugarcane]

You are correct, mutual trade would benefit both far more than aid...wich I agree, most likely at least half ends up in Switzerland.

Yes - If USZ had been supporting PAK through trade than now PAK will be having lot of stake in USZ economy and interests like India. and would have support from Nation. Currently - Our govt. forces and ISI is working like a hired gun for USZ. give them pocket money they well do anything either it is in PAK's interests or not, only condition is that swiss account should keep growing.

 

[Chinese-Dragon]

China has it in trillions.

China has $3 trillion in currency reserves. US debt makes up only $1 trillion of that.

So even if the US dollar went completely to zero (extremely unlikely)... we would still have the largest currency reserves on Earth by FAR ($2 trillion).

 

[jdme]

China has $3 trillion in currency reserves. US debt makes up only $1 trillion of that.

So even if the US dollar went completely to zero (extremely unlikely)... we would still have the largest currency reserves on Earth by FAR ($2 trillion).

Er..What do you think will happen to Euro when US defaults?

 

[Chinese-Dragon]

Er..What do you think will happen to Euro when US defaults?

It will go down, but not to zero value.

If India can survive with only $300 billion in currency reserves, then we will do fine with $2-3 trillion (depending on how much the dollar falls by).

 

[jdme]

It will go down, but not to zero value.

If India can survive with only $300 billion in currency reserves, then we will do fine with $2-3 trillion (depending on how much the dollar falls by).

Ofcourse India can...it uses the reserve only for payment..What India could possibly do with 3 trillion dollar reserve? Invest in US treasury bond?

 

[Farooq]

Same here. I am somewhat culturaly biased...but always think of people I meet as individuals. I am also well-travelled (far more than most Americans). I love to debate, and my American friends who have never left the country get some grief from me too! Personaly I am more passivist than my post may show. Some Americans are dim, but usually only on international affairs. Not thier fault...the news concentrates on domestic issues. (Not a conspiracy...just what sells) I personally use BBC, among other sources (including this forum). Been to the Mid-East...fun, the people nice...but CRAZY! Lol.

When Aryan and others here criticize American foreign policy, it doesn't mean that he hates Americans as individuals.

As a Muslim Pakistani-American, born and raised in the US, and a person who has been dealing with the American public in retail sales for more than 10 years, I have found that Americans are one of the most kindhearted and friendly people you can meet anywhere.

Here is what I think will bring ever-lasting peace and put the American economy towards recovery.

-stop the unconditional support for Israel.

-dismantle AIPAC and it's stranglehold on the American government, ie Congress and the Senate

-immediately STOP all wars, including the covert ops in Pakistan and use those resources here at home.

-focus on lowering the unemployment rate and the get the wheels of this economy going

 

[Juice]

Where are you guys living what do you think the effect of quantitive easing ie printing dollars is its a devaluation and americas been doing that for the last three years. Jobs will go back to america if the americans will accept indian chinese salaries. Why should some fat slob american eating hot dogs with jeans that dont fit comand a bigger salary than a person with similar education etc for the same job in china india etc

Lol, Aryan...I am in very good shape...and my jeans fit. (Living in Britain, I'm sure you have some jeans.) While true, our ability to innovate will keep us fat and happy (such as the computer and internet we are debating on)

 

[Thomas]

Will the U.S. default? Is it really possible?

Interesting read.

he fails to mention in his article that the U.S. had already defualted once before on it's debt back in the 70's. Doomsday didn't happen.............

 

[Thomas]

China has $3 trillion in currency reserves. US debt makes up only $1 trillion of that.

So even if the US dollar went completely to zero (extremely unlikely)... we would still have the largest currency reserves on Earth by FAR ($2 trillion).

if the American economy did actually collapse then you need to take into account the effect on the euro zone as well. your being a bit optimistic with that 2 trillion. then you need to look at the huge export dip to America and the Euro zone. And the resulting loss of Jobs in China's export sector and the rapid domestic inflation from the weak dollar and probably collapse of the EU.

 

[Jade]

he fails to mention in his article that the U.S. had already defualted once before on it's debt back in the 70's. Doomsday didn't happen.............

That depends on how you define doomsday…If a country defaults, its currency would become less valuable, interest rate will rise, inflation will rise, its government bonds will become worthless, taxes could rise, the investments will fall, GDP output will fall, un employment will rise, and, above all, it will lose its independency on fiscal and monetary policy.

 

[twoplustwoisfour]

Why would China let the US default? Isn't most of their reserve in US Dollar?

 

[Juice]

What people seem to forget, we are huge and powerful. If you are hopeful we will break up, not gonna happen. Many countries defualt here and there. They are all around (Brazil, pakistan, many others) with little real change. Life goes on, you just maybe wait on that new car. Then the cycle goes back around, you're swimming in cash again and you buy two new cars.