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Strategies & Market Trends : The coming US dollar crisis
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To: Real Man who wrote (20993)6/26/2009 5:51:42 PM
From: axial  Read Replies (2) of 71456
 
I understand what you and others believe. Up to a point I believe many of the same things.

I just have a problem with oversimplification when the realities are complex and non-linear. Possible outcomes are not binary, and each possible outcome has multiple possible outcomes of its own.

It's true that the problem is economic, but it's also multidisciplinary. It's local and global. It's geopolitical and political. It's debt, and how the debtor interacts with creditors. It's how creditors think, and how they define their self-interest. It's whether the US wants the consequences of default - even if it looks like the only way - and whether other nations want the consequences of US default. You can run economic scenarios, you can run transactional (game theory) scenarios, but you just don't know.

We both agree that the US has crippled itself in many ways, so it's natural to speculate that it will never regain enough economic strength to repay. Britain took a half-century. Finland (with reparations to Russia, too) and the Netherlands - were decimated. They were in far worse condition than the US, and took decades to pay with some pauses.

I would never say default won't happen - never. I just think there are other possibilities. None of them are pretty.

Jim
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