DiscussionQs was funnier. Why were they moderated away?

 

I know, true. Because, apc.

 

I almost banned you.

 

People complained. We might actually tolerate a troll account if they're consistently funny enough though.

 

Genuine question: With what?

 

Hahaha that would been an epic way to go 😅

 

I thought it was going to be about Miatas. Boy was I disappointed.

 

FAAFlyer is right.
Any nation that controls it's own currency can create enough of it to pay any bill it needs to.
It is one of the bases of sovereignty, and why any national debt should be only assumed if it can be paid in the debtor's nation 'coin of the realm'. (a foreign lender may balk at issuing the loan with that stipulation)

AS FAAFlyer pointed out, there would probably be negative consequences if the debt was paid in this manner, but there is nothing to prevent it. Most money (US Dollars anyway) is just entries in a computer. Almost 90% of it doesn't physically exist.

 

Yeah…. That works as long as the debtors are willing to accept your fiat currency for the debt repayment. The backing of “full faith and credit” is beginning to to wear thin around the world as witnessed by the countries joining BRIX. The other major players in the world economy back their currency with ACTUAL things like commodities. There’s a REASON that the Ruble was able to survive and INCREASE in value after we got them kicked off the SWIFT exchange…. Cause they have gas and oil to sell (which now we know, even Ukraine was still buying from them). If/when the petro dollar gets replaced as world currency, then what? We just gonna print more paper? Write more checks?

I bet Lee and Jackson had the ability to pay off all their debts with Confederate currency…. Right up till about April of 1865.

The fact that we back our currency with “our good name and standing” is laughable at this point.

 

To refresh, my response was to your question (regarding paying off sovereign debt) "with what?" There is nothing preventing a past debt being paid with newly created money. Whether that is the best way to do so is another question.
There are some things to remember when we get into the doom scenario regarding USA debt and dollars.

A. Most of the USA debt is owed to itself, in one way or another. Foreign debt is in the minority. Example: Treasury owes a vast amount to Soc. Security.

B. Country to country world trade still requires US dollars for the transactions. A 3 step process requiring a constant supply of US dollars, which have a high velocity. (I accept the judgement of people with a better understanding of this process who assert that this very rapid turnover of dollars lessens the inflationary cost of short term dollar gluts. I readily admit I don't follow all the nuance of this process)

C. The USA (and possibly Argentina) is the only country in the world that has all necessary inputs for modern agriculture in its own territory. Every other country has to have some sort of global trade to either feed itself with imported calories, or have imports of one or more of the inputs required for their agricultural yield. Which brings us around to the above B, regarding the need for US dollars worldwide.

D. It is possible that a foreign lender may, in the future, demand payment in a different currency than the dollar.
Personal opinion, based on correlation from reading more knowledgeable people than I, but I have not read anyone with the same conclusion. That is, the most important factor in the value of a currency is the perceived stability of the Govt behind it. This includes risk of war as well as internal stability. Unlike many other countries, the risk to the USA is of a devastating war is nuclear. A nuclear war probably would mean there is no longer any semblance of an economy, making this discussion irrelevant.
As to internal stability, until 2016/2017 there was no other country that would have even remotely been an alternative. Is there now another country who could be considered having both a large enough economy and more stable? Until that question can be answered in the affirmative, whether the rest of the world likes it or not, they are stuck with the dollar.

More later if I get ambitious.