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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Wyätt Gwyön who wrote (89169)11/26/2007 10:02:35 AM
From: Mike Johnston  Read Replies (1) of 110194
 
Argentinian crisis was caused by a debt default and removal of the 1:1 dollar peg.
US crisis will be caused by the debt default and loss of the reserve status of the US dollar.

Which is worse ?

Both scenarios constitute a debt default and result in very high inflation and collapse of living standards.
But losing reserve currency status will result in much greater inflation and decline in living standards than just losing the peg.

IMO the US will suffer fate much worse. Although at the end the US economy will still be in much better shape than Argentina was, simply because the starting point is so much higher, but the magnitude and relativity of the decline of the US economy will be much worse than Argentina's.
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