[terycarl]

Just out of idle curiosity...what would happen if the U.S. just wrote off their debt and stated that we didn’t owe anybody anything???

[GGpaX4DumpedTea]

“...what would happen if the U.S. just wrote off their debt and stated that we didn’t owe anybody anything?”

I have been thinking along this line for sometime. The Banksters, i.e. Federal Reserve created this debt, let them, the Banksters eat it. Dissolve the Fed in the process, and control of the money reverts to the Treasury, where it belongs constitutionally.

[concernedcitizen76]

Great question. It would be catastrophic on many fronts. A repudiation of US debt would totally crash the global financial system and throw the world into chaos. This especially so because, since Bretton Woods, the USD is recognized as the world reserve currency for international trade and payments. There is change happening on this front as BRICS flex muscle. Many commodities like oil, copper, cocoa, wheat, iron, cotton, corn etc. are priced in USD. Much international trade is therefore conducted in dollars for convenience.

[USFRIENDINVICTORIA]

That essentially what the U.S. does, in part, whenever the greenback is devalued, vs. other currencies. Having the world's reserve currency gives you that power.

Most international debt of most countries (e.g. Canada) is denominated in U.S. dollars. When the Loonie is devalued against the Greenback, as happened in recent months, Canada's debt obligations automatically go up. A dollar we borrowed last year is now equal to over $1.20 CDN in debt -- because that's what it costs us to convert to U.S. dollars for repayment.

OTOH, U.S. debt is denominated in ... U.S. dollars. If you were to devalue the greenback by (say) 50%; you would, in effect, only owe half as much as you would before the devaluation.

If the greenback loses reserve currency status (something that's happened to all previous reserve currencies), that could cost the US. trillions.