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To: ctdonath2

“That’s like the USA having to make a $144B payment.”

What has destroyed Greece is the fact that they can’t devalue the Euro or “Quantitatively Ease” more of them into existence when needed.

The USA has been able to use all sorts of financial trickery to kick the can down the road farther than our friends in Athens, but ultimately we’re in the same boat.


24 posted on 06/30/2015 7:58:04 PM PDT by Junk Silver
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To: Junk Silver

Problem is, when talking debt on that scale you reach diminishing returns on such inflation. Comes a point when printing more doesn’t really do any good. Creditors figure out the scheme fast, demanding proportional or dynamic interest (or refuse to lend at all). If just making interest payments, more borrowing means greater interest; US debt service alone is about 20% of federal spending - which, alas, means it’s a much greater percentage of actual revenue, bringing us dangerously close to ALL income going solely to debt service (without which the system collapses). And fractional-reserve banking means there is far less actual cash than there is imputed ownership of money; there exists only some $4T _cash_, about half overseas and maybe half that squirreled away under mattresses (so to speak), so when creditors start demanding payment in hard currency the government will be unable to come up with enough - even firing up the physical presses will require a whole lotta time & effort to produce on the order of $100B paper dollars (and methinks the briefly-entertained minting of a $1T coin won’t go over very well).


54 posted on 07/01/2015 2:09:04 PM PDT by ctdonath2 (The world map will be quite different come 20 January 2017.)
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