Comments on: US Dollar making a comeback! Just Kidding!

By: Fabrizio

Fabrizio — Wed, 21 Nov 2007 20:25:42 +0000

At #8: Indeed welcome to the real world…
Some examples: if an American’s house defaults, some foreigner might walk in and buy it off his bank because to the foreigner, that house is only worth 100,000 €…

We’re not at the houses yet, but it’s already starting with companies: Lenovo bought IBM’s PC division, Huawei bought all of 3com, …

The US is being bought from under our asses already!

By: Misanthropic Scott

Misanthropic Scott — Tue, 20 Nov 2007 18:57:22 +0000

I hope no one thinks this has anything to do with the two trillion dollars we’ve thrown away on the Iraq war.

By: Mister Justin

Mister Justin — Tue, 20 Nov 2007 18:01:01 +0000

15,

Just print out more trillions? And that would help out how?

By: MikeN

MikeN — Tue, 20 Nov 2007 17:53:40 +0000

#8, you’re missing the point.
This keeps getting repeated by people with talking point that other countries holding all this debt is a problem.

Well let’s say they come in and demand payment on a trillion dollars of t-bills.

First of all t-bills have specific payment schedules, so they’ll be ignored. Besides that, the payments are to be made in DOLLARS. So a dollar with less value is easier to repay.

The government could just print out another trillion dollars in bills too.

The problem of foreign holders cashing in would be a problem if they demand gold in return, which is no longer being used by the US.

So the trillions of dollars in outstanding debt is not a problem for the US.

What is a problem is the current deficit, and more the future deficits in the budget.

By: Mister Justin

Mister Justin — Tue, 20 Nov 2007 17:30:08 +0000

France did the same thing to the Dutch years and years ago. It’s nothing new. BUT, debt re-payment is a mantra of the US banking system. Of course, spun the right way, anything is a positive. Try teaching me something new next time.

10. I have silver too. Made a much, MUCH better return on it than gold, and far quicker too. Kitco has great services. CHeck it out!

By: QB

QB — Tue, 20 Nov 2007 17:29:16 +0000

That’s an old saying that doesn’t completely translate into foreign debt. True, the US foreign debt is a problem for China (and other lenders like Japan and Argentina) but they are hedging their forex risk to cover potential losses – which is self fulfilling cycle of reducing the US $. Also when the US state department tries to press China on trade issues or arms buildup they will have absolutely no leverage.

Overall though it means a loss of economic confidence in the US which means less foreign and domestic investment – bad news for growing businesses and people who want jobs. On the plus side, companies like Infosys are offshoring jobs to the US.

By: Frank IBC

Frank IBC — Tue, 20 Nov 2007 17:18:43 +0000

Or to put it another way, if you owe the bank $10,000, you’ve got a problem.

If you owe the bank $1,000,000,000,000, the bank has a problem.

By: Frank IBC

Frank IBC — Tue, 20 Nov 2007 17:17:37 +0000

Not if the the foreign debtors want payment in full, and do so by returning the T bills they hold. What is the US going to do when trillions of T-Bills are returned?

Not if the USA follows the example of Argentina and Brazil in the 70s and 80s. China could very easily find itself holding a zillion worthless IOUs.

By: Balbas

Balbas — Tue, 20 Nov 2007 17:12:54 +0000

A good many people I know keep wondering if I have any gold? What? Are they wanting to sell me some? NO! They want’ to see if I was as gullible as they buying a single coin just to say, “Hey! I invested in gold!”

I have silver, the poor-man’s gold.

By: James Hill

James Hill — Tue, 20 Nov 2007 17:01:10 +0000

#8 – Not pay a damn cent, since they can’t make us by force.

Welcome to the real world, junior.

By: Mister Justin

Mister Justin — Tue, 20 Nov 2007 16:53:03 +0000

Not if the the foreign debtors want payment in full, and do so by returning the T bills they hold. What is the US going to do when trillions of T-Bills are returned?

By: James Hill

James Hill — Tue, 20 Nov 2007 16:52:37 +0000

Cry, liberal, cry.

By: MikeN

MikeN — Tue, 20 Nov 2007 16:40:23 +0000

What’s this faith and credit for? You have a dollar bill, it is worth a dollar. If the government keeps printing more dollars, your paper drops in value.

By the way, if there is trillions owed by the government in outside debt, then crashing the dollar makes it easy to repay that debt.

By: GigG

GigG — Tue, 20 Nov 2007 16:39:29 +0000

#2 “You still have the military, but they are not fighting standard wars any longer.”

But we can and we are really much better at it. Nor is anyone else any better at the non-standard ones either.

By: Mister Justin

Mister Justin — Tue, 20 Nov 2007 16:24:40 +0000

Fixed that for ya! (thanks!)