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RE: Why the Federal Reserve Can NEVER Raise Interest Rates
US can't really bankrupt -- their liabilities are denominated in a currency they can print.
US can't really bankrupt -- their liabilities are denominated in a currency they can print.
Agree 100%, which is why they will never raise rates. Instead I expect they will try to inflate the debt away by paying it back with worthless dollars. Thanks for commenting.
Yes, thank you eeks... Many people either fail to recognize this or don't work through the implications. Aside from the fact that a large portion of the United States debt is owed to its own agencies, all U.S. debt is denominated in dollars and they could literally print dollars to pay off every cent of the debt at any moment.
When the manufactured crisis known as the "debt ceiling" was being debated in congress (one of the many times), the idea of minting trillion dollar coins was floated... even by former president Clinton. The president has the authority to mint coins in any denomination, and the constitutional responsibility to pay any debts that the federal government accumulates.
Now... if you want to have a discussion that money should not be based on debt to begin with, that's a conversation that I'd like to have. ;)
Fiat money is turtles all the way down. By design. Debt created from nothing is extremely abstract, it's a human construct, it's resistant to simple analysis.