[MHGinTN]

Here's the problem with Mister Shiff's routine: we cannot pay the debt with cash, so someone is going to eventually assert in a democrat oligarchy that we must pay the debt back with property and resource rights held in 'federal lands'. The federal oligarchy (we are no longer a Constitutional Republic) cannot ween itself from using credit to fund everything, so when no one wants to buy our bonds/notes, we will have sincere politicans insisting we must grant title to federal lands/resources to dissolve the standing debt so further credit can be obtained.

[squarebarb]

Sounds logical, but asking for clarification -— meaning we could hand over Yellowstone to China for instance?

I find that not unimaginable.

[parsifal]

But we can pay in cash. We simply print the money and give it to them. They’ll have to spend a lot of here in the U S.

parsy, who is staying awake nights worrying abut the Chinese debt.

[darth]

We could just invite any foreigner with, say, $10M in cash to emigrate. Get enough Chinese to emigrate and it solves the problem. Lots of entrepreneurs and engineers we could use.

Seriously, markets work these things out. So if the Chinese don’t buy more bonds then the Fed govt. will have to offer a higher interest rate. At some point the interest on debt which is a line item in the federal budget becomes so high that they cannot borrow more.

In the end, the world free market for debt will DISCIPLINE Obama and Co. They just cannot spend as much as they want to. In fact, with tax revenue plummetting, I think they will have to CUT spending whether they like it or not. As for the Federal Reserve, it is private and may NOT do Obama’s bidding if the Fed thinks that hyperinflation is on the way.