[seowulf]

We don't peg the dollar, so the government can't suddenly decide it's worth less.

Of course the dollar is pegged...to debt.

Here is how it can be devalued: the government says all bonds issued before date x must be traded in for a new series issued date y with a couple of zeros chopped off the coupon. Bonds not traded in become valueless.

Now your $10000 bond becomes a $100 bond.

[Toddsterpatriot]

Of course the dollar is pegged...to debt.

No it isn't.

Here is how it can be devalued: the government says all bonds issued before date x must be traded in for a new series issued date y with a couple of zeros chopped off the coupon. Bonds not traded in become valueless.

Since all Treasury bonds are electronic now, that would be very simple.

But that would be defaulting on the debt, not devaluing the currency.