Default?
-FDR defaulted on gold as money to the people of the US. He lied to them saying this was a temporary crisis and the government needed their gold to save the system.
-Nixon defaulted to the international community on gold telling them that they would no longer redeem dollars at $35/ ounce of gold. He lied to the world and said it was because of speculators. He also said it would be temporary.
-Now we have 20 trillion in US debt and growing exponentially. It is mathematically impossible to pay off. So will the results be similar to the past monetary problems? Will default be the solution? Trump has stated that he may want to renegotiate the debt. How would that work?“I’m the king of debt. I’m great with debt. Nobody knows debt better than me,” Trump told Norah O’Donnell in an interview that aired on “CBS This Morning.” “I’ve made a fortune by using debt, and if things don’t work out I renegotiate the debt. I mean, that’s a smart thing, not a stupid thing.” “How do you renegotiate the debt?” O’Donnell followed up. “You go back and you say, hey guess what, the economy crashed,” Trump replied. “I’m going to give you back half.”
Now read this…http://thegreatrecession.info/blog/global-epocalypse-inevitable/
The flaw in Donald’s argument is everything is leveraged off of sovereign US debt. Shrink the size of it through a threatened renegotiation and the amount of assets levered off of it has also got to be reduced. Resulting in a massive liquidation.
This is what QE was really all about. It was first and foremost designed to maintain govt bonds so as not to have a deleveraged liquidation. This is different from The Donald’s previous experiences with corp debt.
https://youtu.be/iRzr1QU6K1o
Thanks Plunger…good point..He needs to hire you Secretary of Debt 🙂