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The four times the United States government defaulted on its debt (2021)

thehill.com

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Re: The four times the United States government defaulted on its debt (2021)

#11

Post by ragnot »

birdyrooster wrote: post #5
jvanderbot wrote: post #2

> The fourth default was the 1971 breaking of the U.S. government’s commitment to redeem dollars held by foreign governments for gold under the Bretton Woods Agreement. Bretton Woods is a fascinating topic on its own. Accidental Superpower is a good read that dives in a little, but isn't focused specifically on it. I can't resist bringing up that book because in one of the later chapters, it predicted the invasion of…

The past Bretton Woods system and US currency seemed to change from a process which can converting notes into precious metals into a process which can convert notes into military hardware and oil. Is there a name for this?

Some people call it the petrodollar others call it American hegemony.

Re: The four times the United States government defaulted on its debt (2021)

#12

Post by throw0101a »

curiousllama wrote: post #7

The US Government has never defaulted on its debt under the current (~50 year old) global financial system. It HAS defaulted when transitioning off the gold/silver standard, when the world moved off Breton Woods, and during the Civil War. I’d note that each of those defaults were related to the total collapse of the existing rules for national/global finance. So ultimately, these defaults do bolster the case for the…

> The US Government has never defaulted on its debt under the current (~75 year old) global financial system.

Except for 1979:

* https://www.reuters.com/article/usa-debt-default-idUSN1E76A0...

* https://www.theatlantic.com/business/archive/2013/01/heres-w...

* https://archive.is/jKayD

Re: The four times the United States government defaulted on its debt (2021)

#13

Post by [deleted] »

curiousllama wrote: post #7

The US Government has never defaulted on its debt under the current (~50 year old) global financial system. It HAS defaulted when transitioning off the gold/silver standard, when the world moved off Breton Woods, and during the Civil War. I’d note that each of those defaults were related to the total collapse of the existing rules for national/global finance. So ultimately, these defaults do bolster the case for the…

[deleted]

Re: The four times the United States government defaulted on its debt (2021)

#14

Post by tivert »

curiousllama wrote: post #7

The US Government has never defaulted on its debt under the current (~50 year old) global financial system. It HAS defaulted when transitioning off the gold/silver standard, when the world moved off Breton Woods, and during the Civil War. I’d note that each of those defaults were related to the total collapse of the existing rules for national/global finance. So ultimately, these defaults do bolster the case for the…

> The US Government has never defaulted on its debt under the current (~75 year old) global financial system.

> It HAS defaulted when transitioning off the gold/silver standard, when the world moved off Breton Woods, and during the Civil War.

If moving off of Breton Woods was a default, then your first statement is wrong, and the US hasn't defaulted on its debt in 50 years:

https://en.wikipedia.org/wiki/Bretton_Woods_system#Paralysis...

Re: The four times the United States government defaulted on its debt (2021)

#15

Post by d00wgnir »

curiousllama wrote: post #7

The US Government has never defaulted on its debt under the current (~50 year old) global financial system. It HAS defaulted when transitioning off the gold/silver standard, when the world moved off Breton Woods, and during the Civil War. I’d note that each of those defaults were related to the total collapse of the existing rules for national/global finance. So ultimately, these defaults do bolster the case for the…

Perhaps history shows that "literally bring[ing] an end to the current global financial system" is not as uncommon as people expect.

Re: The four times the United States government defaulted on its debt (2021)

#16

Post by rootusrootus »

Our politics is so dysfunctional. We waste tremendous amounts of time making the same arguments over and over and over, like somehow this time will be different. I assume both sides want it to continue, though I don't really understand the motivations from the left. The right is super easy to understand, it's a huge win for them every time.

Re: The four times the United States government defaulted on its debt (2021)

#17

Post by throw0101a »

throwawaaarrgh wrote: post #3

Is it time to start diversifying my retirement money into international company index funds?

International diversification is generally a good idea. Good video by Ben Felix citing a bunch of research papers (with DOIs in the description):

* https://www.youtube.com/watch?v=1FXuMs6YRCY

Re: The four times the United States government defaulted on its debt (2021)

#18

Post by ragnot »

roenxi wrote: post #8

The US defaulting isn't really the most interesting topic at this point - scenarios where it honours its debts became implausible a while ago. It'd be much more interesting to get an honest insight into the views of the Chinese & Japanese leadership (two countries with the largest US dollar holdings) on what they think they are getting out of this. The numbers are obvious - someone isn't going to be getting much in t…

No better alternative for the Chinese. US Treasuries are the worlds most liquid and deep markets for money at the nation-state scale. Euro's are still in America's sphere of influence. Holding Yuan just destroys their export economy.

Japanese depend on America for security so they do it as a sort of quid pro quo.

I do agree though: pensioners (i.e. US public) will suffer first. International treasury defaults would threaten US hegemony.

Re: The four times the United States government defaulted on its debt (2021)

#20

Post by Jedd »

curiousllama wrote: post #7

The US Government has never defaulted on its debt under the current (~50 year old) global financial system. It HAS defaulted when transitioning off the gold/silver standard, when the world moved off Breton Woods, and during the Civil War. I’d note that each of those defaults were related to the total collapse of the existing rules for national/global finance. So ultimately, these defaults do bolster the case for the…

> ... when the world moved off Breton Woods ...

When Nixon decided to end Bretton Woods.

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