Topic: We all gona pay USA debt atleast Western countries (Read 147 times)

They use it as a hedge against their incompetency.

BTW some of the "countries" in that list can not even be counted as a country like Marshall Islands that is more like a village with 41k population!

The USA is the healthiest horse in the glue factory.  😂🤣😅

The OP confuses the political default through the self imposed threshold with the US $ loosing its value.
The government in default means the US government cannot pay its obligations.

The dollar itself is official currency for 11 countries. They use it as a hedge against inflation.

The USA is the world's first economy, and probably still the most powerful country politically (even though that power is diminishing). They sure are playing with fire when it comes to overprinting fiat, but they are not on the verge of collapse. Also, with the USD dominance as a global reserve currency, it is in the interest of tons of countries to believe in the strength of the USD because if the dollar falls, they will suffer, too.
I have to say that I found some of the op's thoughts, unintelligible, so I commented mainly on the USD and not on USDT, debt, China, etc.

Buying USD or USDT (which is worse than USD) means buying the US debt. Since the US has lots of debt which they won’t be paying back by manufacturing goods and services, holding or buying USD is as good as shooting yourself in the foot.

If you think the US economy is in a bad shape, you shouldn’t be buying USD. You should run away from it as fast as you can. Buy real goods especially the ones that produce income like real estate, land and stocks instead. Commodities and crypto are also better than the USD.

The US can only pay back its debt by printing more debt paper and sooner or later it will blow back in their faces.

What is / was a ruly empire? Was it UK? Was it France? Was it any imperial power? What is China doing? Not war mongering in Himalaya to occupy Ladakh and Tibet? In south with Taiwan, Japan, Vietnam, Philippines? Very ruly empire to you? What did USSR/Russia do? better than USA? Who asked other countries to export to USA? Why don't they have a viable middle class? Why don't those countries have a consumer base? Who stopped them from empowering their citizen and uplifting them economically? USA is not begging them to export to USA. Rather USA is trying to discourage imports from China. Trump imposed duty on Chinese imports that Biden retained. Why are these countries crying if USA implements a policy to discourage imports? They are dying to export to USA and then bitching about USD? If you export to any country you are most likely to be paid by their currency. I understand what Bush and Obama did is wrong. But that is done in India and China decades after decades! Trump had to do it during pandemic. But Biden also did it without reason. Look at the last speech from Fed President. He is indirectly saying there is no need to borrow more when you have a high inflation. But the party of the poor dear to the international folks and UN! Obama bombed 8 countries yet got Noble peace prize, Trump stopped all wars. The moment democrats came back to power Russia attacked Ukraine! Last time Russia attacked Ukraine when Obama was in power. What did UN do? it is only attempting to push Muslim immigrants into Christian and Hindu majority countries. Arab nations don't provide citizenship unless your dad and mom were Arab. No provision for a European or an Asian to become citizen even if they are Muslim and stayed in Arab nations for decades. Why is UN mum on this while being very vocal in pushing Muslim refugees to Christian and Hindu countries? Why don't your kind note that? Which world body is acting as it should? UN? WHO? India has 1 billion people, 5th by GDP. 4th by military might but does not have veto power in UN. It is some joke of world arbitrator? The countries that are exporting to USA have no domestic capacity to consume and USA pays the best price. That is USA's fault? US folks are too polite. That is why nobody shows China / Iran that they are not even wearing clothes. Instead of hating USA don't do business with USA. Don't export to USA. Don't buy US debt and then complain. Be accountable for your choices. Why can't they see that USSR/ Russia, Iran, China were/are also imperialistic and war mongers? If the emperor wears communist robes then your myopic eye does not recognize imperialistic behavior?  USA has right to do whatever suits USA. It is not a slave of other countries. US donates a lot of money to other countries. How much your favorite country donates to other countries? US inflation started from Bush and Obama. What is the inflation rate in China / India for last 70 years? Just because media does not talk about it you don't note? BRICS currency will replace USD? What are the inflation rate of BRICS? Don't learn economics from mainstream media! Why Russia attacked Ukraine? Why Hamas attacked Israel? These wars were started by US? US inflation under Biden is due to supplying arms to Ukraine and Israel at US taxpayers cost. Why are you blaming US for these wars? Why are you not blaming Russia and Hamas for starting wars? Nobody shows you the mirror and that is the real problem.

They are still printing money to pay their own debt, but they do it all in a process that is not too revealing. Because if they do it openly, they will face opposition from other countries and lead to a rapid collapse of power.
Printing money, creating war, creating world instability and then silently exporting inflation to the world to maintain its hegemonic position, and that is the process of the United States.
Many countries have realized that but no one dares to stand up and fight back, but finally we have someone brave enough to stand up and BRICS is the result, the answer to the US's unruly empire.

Why would USA default when it can print money and tax its citizen?


I agree.


Depends on your home currency. I earn in USD, so does not matter to me, but I agree if you are in a country that exports to US then your currency is going to depreciate at the least as much as USD.


I agree.


I disagree. US is the net consumer/ importer of finished goods for almost all other countries. China is a net exporter/ supplier to most other countries. China can never become USA because it cannot survive without exporting to USA. China has a compulsion to devalue its yen every time USD is devalued in order to maintain its edge in export. The same applies to India and other countries that are all net exporter to USA. If these exporting currencies really appreciate significantly against USD then manufacturing and service / IT jobs will return to USA causing increase in average income and inflation which will raise the USD interest rate even higher which will attract all investment out of China / India back into USA. This is why it is a hoax that Yen / INR will replace USD as the trade currency. World may adopt barter / Gold / Bitcoin to de-risk from USD but as long as their economy is dependent on exporting to USA or financing those export facility / infrastructure they have no option but to hold USD / US sovereign debt and devalue their currency to match any money printing in USA. So the best place to be is in USA. As I explained above, whether exporter decide to devalue their currency or not against US dollar, It will be beneficial to USA. Unless India / China / Eu can become self sufficient economy they cannot harm USA economically. If you love living in big cities then Singapore is also a good choice because they are tightly tied with USA.
 
UK will become a poorer Spain as UK is a cloudy gloomy place. It does not have sunny beaches like Spain or Italy. May be Ireland and Scotland will be a better tourist place. Uk is being propped up by the generational wealth they looted from Asia and south America. That wealth is displaying multiplier effect for so long. Once that is diminished England has nothing but tourism. Ireland and Scotland will be better for tourism.

Checkback after 2 decades. I am always invested according to my thesis. I don't regularly visit this pages. It is my opinion right now. It might change especially if the basic assumptions change and I may not come back to update.


I agree.

If I recall, most of the debt that US have is their own money anyway, that's why they're not incentivized to do any kind of payment to that debt so they just keep on doing the printing and the lending because they know that it won't matter as long as they're getting their taxes and they can maintain and fund their war machines, USA is happy to do all the stuff that they have to do when it comes to increasing their debt, they will not mind. Maybe they would face another crisis like the one from 2008 but I don't think that it's going to weaken them as a country, long as their influence is there, that country will persist.

Exactly. This is something people usually forget. Even if Tether guys were the most honest company on earth and their token were 100% backed by actual dollars, it still doesn't reduce the risk of this centralized token simply because the US government can decide to shut them down some day and that is the end of this centralized token in a blinking of an eye.

Centralized cryptocurrencies are terrible and super risky but at the same time they are tools that people use and will continue to use specially if they provide a utility like what Tether does.
The only thing people should be aware is the risks they are taking and avoid delusions of having security.

The only deluded person here appears to be you. Apart from a few fringe conspiracy theorists, nobody is claiming that America will default. Every so often they do a little political brinkmanship, which seems unnecessary, but the debt ceiling is raised and that is the only event which would come close to causing a default in normal times. America has the reserve currency of the world which gives them incredible power and makes it much harder for any other countries to attempt to bankrupt them. Even China has massive amounts of American debt that it was buying up previously, because it is such a reliable place to store value. However if they start printing money again in future, that's when you lose value over time.

As a Spaniard myself I don't know whether to feel insulted or flattered by that comment (not such a bad place if people want to come here to have a good time).

Back on topic, most Western countries are already in debt themselves, so USA is the paradigm but not the exception. Not a good sign, I agree, but is it enough to see the future as clear as you do? Yes, inflation is strong in most Western countries, so I don't think that the best strategy is to hold your savings in USD or EUR (or worse, USDT/C/whatever pegged stablecoin). But from that to a new world order there is a big difference.

Your statements are self contradictory. You are saying that USA cannot pay the debt and at the same time you are saying to buy US dollar. How does that work?

Also it is not a matter for USA to start printing more money. USA economy is mostly backed by war. They will be quick enough to find a new scapegoat in middle East and attack them to obtain more oil for their reserve.

If nothing works, they will simply increase the debt cealing. There are many ways available to the governments. So nothing is going to change drastically.

I don't think the dollar is cheap but considering the situation of the USA and of all the world I can say, you are right but to some extent only as you are not going to get 2x to 10x in the next 5 years from the dollar price. Elections are coming and after elections, they might try to make efforts to increase the strength of the dollar and maybe that's why you are bullish too but in the long run, I don't see the dollar as a good source of income. I prefer BTC is better than buying the dollar.

I won't talk about the fact that USD is centralized and BTC is decentralized, but I will say dollar is not that reactive to elections but BTC will be highly influenced by the election especially if Trump wins and I don't know why I am getting the feeling that he will win.

They cannot just print money to repay debt, if that was the case they will not need debt to service their expenses at all, just print more money for spending. I understand that indiscriminate money printing has increased over the years but there are still some processes which has to be followed.

USA can't default because they have the money printing machine. Why going bankrupt, when you could print more money and pay your debts?
Your financial advice is nonsense. You say that the USD is cheap and it will become stronger and at the same time, you say that China is going to become the new USA. Isn't this trolling/shitposting? Several accounts are making shitposts all over the Economics forum. This might be one of them. China will never become the new USA because the Chinese yuan will never become the global reserve currency.

If you truly believe that China will become the new America, then you are contradicting yourself by your adherence to the dollar and your continued belief in its efficiency. China cannot take the place of the United States and at the same time remain dependent on the dollar. Currently, there is a complete global trend to get rid of the influence of the dollar, especially on major economies. If many of the major economic countries were not afraid of the agression of the United States, they would have abandoned it completely because of the problems accumulating because of it.

Go and buy as many dollars as you want, because there is a high probability of achieving profits in the medium term for you as an individual. But according to the logic of countries' economies, betting on the dollar has become a major risk.

Why not you consider the Bitcoin option? I think it has better opportunities than the dollar at all levels.

The US dollar might be the dominant currency in international trade but it is not the best-performing currency. The dollar is also losing its value due to inflation. I would rather advise people to buy Bitcoin, a currency that has proved over the years to be a good investment and an effective hedge against inflation.


Tether Limited has told people that a USDT is pegged to the US dollar. How are we sure that these crypto companies have enough money to back all the USDT they issue? Who audits their account and how trustworthy are these auditing firms? Besides the government freezing their accounts people holding these stablecoin are at risk of being scammed by the issuing companies. It will be far better to keep the dollar issued by a Central Bank than to hold stablecoin issued by a company controlled by an individual or a group.

He must really be delusional; saying dollar is dollar in the first place shows that he is ready to sink himself somewhere without even realising it.
 
Imagine buying and holding USDT, which was later found out to be among a wallet, which the three later governments decide to blacklist. That's the end of it all, as the fund will be frozen even if it's not on a centralised exchange.

Dollar is dollar; but centralized shitcoins like tether that are controlled and issued by a centralized authority that can freeze your accounts, steal your money, get dumped to 0, etc. are not dollar. So if you want to bag hold something as risky as the US dollar while global dedollarisation is speeding up and countries may dump US treasuries (China has already liquidated hundreds of billions) then do yourself a favor and just bag hold dollar itself.