There is so much I am hearing about these European nations that can default on their debt. Can some summarize this into something simple.
What do you think will happen to the world if the U.S will default on their debt.
I am pretty sure China would be completly screwed since they hold the majorit of U.S debt.
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It will not
It's all political bullshit
All they have to do is literally print money
I think there are two key differences between a US default and peripheral EU defaults. Firstly, if the US does default it wont be permanent, only until the debt ceiling is raised (which it will be), and also the US is still the largest economy in the world and the main world currency, so there will be no flight from US assets as there would be in Europe.
Secondly, a US default would be more of a technicality, rather than the situation in PIIGS where governments would actually be permanently unable to pay debts, thus having less long term repercussions.
As others on this site have said, there is a lot of fat to cut in the US whereas in Greece / Ireland / Portugal they're already running pretty bare.
All this being said, I don't think the US will default, it would be very embarrassing to be downgraded and to default just because of political squabblings.
Everyone will be billionaires!!!
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