Mathias
The key point I am trying to make is that it is impossible for the US government to default on their Public debt when that debt is nominated in a currency that they can print. They may further devalue their currency but thats a different story. I am not denying consequences of further QE just refuting the notion that the US could default on debt payments.
I was trying to make a clear distinction between the US for example and the PIGS who found themselves in a much more precarious position ie interest payments on burgeoning debt nominated in a currency that is controlled by the ECB. A very different situation don't you think?
I maintain my position that the chance of the US defaulting on public debt is about as likely as the world ending under a cataclyismic event in December 2012 (as magically foreseen by the Mayans).
There is a plethora of countries who have higher levels of public debt as a % of GDP than the US, hence why demand for US treasury bills remains strong.
The key metric is public debt as a % of GDP some cursory reading will show that the US had a higher level in the 1950's than it does today.
What the US and in fact the majority of western countries now need is a heathly extended dose of inflation. Governments ultimate solution to debt is to reduce it with inflated tax revenue.
- Forums
- ASX - By Stock
- operating margins and profits
MathiasThe key point I am trying to make is that it is...
Featured News
Add GDO (ASX) to my watchlist
Currently unlisted public company.
The Watchlist
1CG
ONE CLICK GROUP LIMITED
Mark Waller, MD
Mark Waller
MD
Previous Video
Next Video
SPONSORED BY The Market Online