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View Diary: Fitch Ratings puts U.S. on downgrade watch (63 comments)

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  •  It's not that the Tea Party doesn't understand... (11+ / 0-)

    ...it's that they want a default.  Read their commentaries.  Many have a vision in which default leads to the U.S. losing the ability to sell Treasury bonds on the international markets (no one would buy them after a default) and thus losing the ability to borrow.  This is -- to the Tea Partiers -- equivalent to passing the Balanced Budget Amendment.  If they U.S. government can't borrow, they argue, the government will just have to run a balanced budget.  Simple as that.  It's a wacko theory, I agree, but it's making the rounds in Tea Party circles.

    •  There will still be Treasury Bond buyers (3+ / 0-)
      Recommended by:
      cocinero, Khun David, Odysseus

      They are just going to need a MUCH higher interest rate.

      I really can't see any currency in the world capable of being a new reserve currency.  The Euro?  Is anyone sure it'll still exist in 10 years?  The RNB?  Seriously?  The Pound?  Been there, I don't think a nation's currency gets a second chance.

      But that makes this situation tougher to predict.  As some economist said recently, it's like predicting the injuries of someone who falls a few stories out of building.  You can't say exactly what the injuries will be, but you can be damned sure there will be some injuries...

      •  Why not the Renminbi? (0+ / 0-)

        It's a really big country, with a really large economy. Sure, there is still a lot to develop, and they export a lot of crap, but they are thriving ... and building a space station of their own, e. g., because the US won't let them join the international one ...

        Really, this century could become a Chinese century. Do not understimate them.

        "This isn't America" - Zenkai Girl

        by mythatsme on Tue Oct 15, 2013 at 03:22:22 PM PDT

        [ Parent ]

        •  The Looney! (1+ / 0-)
          Recommended by:
          Hey338Too

          Seriously, think about. A new reserve currency from the adult on this continent that actually calls the dollar coin a Looney. This whole debacle is ludicrous and LOONEY! So it's perfectly appropriate I think.

          Plus we Canadians would recognize the self-debasing humour in that and be proud to be of service to the world... LOL

    •  I've argued this over and over again (0+ / 0-)

      with a bagger.  He insists it's EXACTLY like maxing out your credit card so that we can't spend any more.  I'd have more luck teaching a pig to sing.  

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