The Government Will Default On Its Debts

The Market Oracle ^ | 11-02-2009 | Gary North

[sickoflibs]

I dont see how. Their debt is in their own currencies. Will the federal government default on it’s debt to the federal reserve?

[NTHockey]

>>Wars cost money, lots of money. Not disputing your point, just ask yourself how it’s going to be funded.<<

Guerrilla warfare. In the forests, in the swamps, in the mountains. For examples, see "Red Dawn", "The Patriot", "Mad Max", etc.

[bvw]

Th Iranians do not have a cohesive army in the first world sense of an army. Remember how Saddam’s was a cobbled together mix of poorly motivated units.

[bvw]

The tax rate chart is intriguing. What is implied that after 1960 two forces that act like taxes really came to outweigh all others and ran out of control. One force is monetary inflation. The other — a novel intellectual speculation just come to my mind — is the “swag”. The bezzle.

The portion of economic wealth denominated in debt which is stolen by any means out of the treasury — hidden off-books entitlement programs, poor accounting, fraudulent accounting, outright theft.

[I Buried My Guns]

My scenario is this:

When the US announces it will not honor it's debt, a third party occupies the US in order to secure it's assets for the creditors of the US.

Some believe the third party will be the UN, others say NATO, still others say it will be the actual Chicoms, who will stage in Mexico (with the approval of Mexico in return for a cut of the spoils, namely lost territory along their border) and from there they will invade in a multi-pronged attack in an attempt to secure both California (the actual breadbasket of America) and the refineries along the Gulf coast.

[bvw]

I think that scenario is unlikely, but not impossible.

[I Buried My Guns]

It makes for good reading.

"Good" being suubjective, but I read a lot of post-apocalyptic literature for free on the Net. I guess you get what you pay for!

[RockinRight]

If they ALL default, doesn’t it kinda just wash itself?

If I owe Joe $1000 and Joe owes Frank $1000, and Frank owes me $1000, and nobody can pay, does it really matter?

[MSF BU]

Assets could be sold off to pay the debt. The federal government owns most of the land in the West and much of it in the East.

[Ultra Sonic 007]

I was under the impression he was citing the claim of Keynesians.

[Carry_Okie]

The federal government owns most of the land in the West and much of it in the East.

It's already been collateralized back at the collapse of Brettonwoods in the 1970s.

[joesjane]

I don’t know:-( I consider myself fairly bright but I am getting confused by the financial news that keeps pouring out every day.

[misterrob]

With nukes in play there will be nothing to split...

The default is coming though and it means people will have ti start being responsible for themselves and their extended families since there isn’t enough wealth to confiscate to plug the holes and at some point people will also just rebel against the taxes.....

[east1234]

Seems to me you all 3 be broke, no savings to invest or spend.

[nikos1121]

Glenn Beck covered this quite nicely. The first thing that goes is the dollar, the next are industries i.e. jobs, the third is the housing market, as there is no money and people default. It’s a domino effect.

[joesjane]

Here is my question. I am trying to pay off all debt so more of my income stays in the household. At the point where everything is paid off I am thinking about buying old silver coins in bulk plus more ammo. What else is there to invest in where your money is safe? I am afraid the paper will be worth nothing so I feel like I should be stocking up now.

[Jacksonian Grouch]

bttt

[Jacksonian Grouch]

bttt

[johnny reb]

You have to check out the “Red Dawn II” movie senario.

[businessprofessor]

I agree with your scenario. I do not see central bank failure or default because politicians control central banks and money can always be printed. Currency collapses have been only cleansing tool to adjust reckless government policies. However, currency collapses have been limited to reasonably small countries with ready currency substitutes. The collapse of the dollar will devaste us but also probably many other countries. In addition, almost every country is engaged in reckless government policies. What currency will be the substitute for the collapse of the US dollar? If barter is necessary, there will be little trade especially at first. Every economy will decline substantially because of much lower trade. Can we have a world bankruptcy and start over? The bottleneck is the huge number of tax takers demanding their slice of the pie when there is no pie to slice. There are some grim scenarios that look like a trap for everyone.