[sleton38234234]

>> you can choose to go bankrupt or you can choose to pay it.

There's another option. One that's far more politically favorable: You simply take out more and more debt, until finally the whole world sells US treasuries. at that point the fed prints unlimited amount of money to buy up all that debt. And when the US pays interest on that debt, it just pays it to the federal reserve which then sends it back to the US. This is the end game, we're looking at. And the result implies inflation and LOTS of it. that's what I mean when I say, they will default on the currency.

[astrange]

Does the market, who should know, agree with you?

(Hint: US 10 year T-bond rate is 3.4%. That's not very high. Also, we have the world's largest military and can do whatever we want.)

If you want an exciting doomer story to believe in, try deflation. It's worse than inflation, so you'll look more cynical.

[sleton38234234]

I mean sure: the fundamentals all point to deflation: the aging population, the increasing debt and technology are all deflationary.

But, in this day and age where the fed has sooo much power, it doesn't matter. see below.

>> If you want an exciting doomer story to believe in, try deflation.

The Govt and the fed are both on the same page, in this regard: they will almost NEVER allow a deflationary spiral to happen. If you watch a lot of financial news from people who read the fed and intrepret what they're signalling, you'll find there is widespread agreement on this (especially as of the 2018 powell put).

In the history of countless countries and currencies from all over the world, all the outgoing empires and countries end up defaulting on their currencies in the end game. See Ray Dalio's latest book, he's got a great explanation on this.

You bring up an excellent point about the T-bond rate. If everyone already knows the endgame, then why hasn't the bond market priced it in yet? Shouldn't everyone be dumping T-bonds en mass? Are they slowly? these are the questions I'm trying to get answered. Part of it is because the fed was already buying up a bunch of t-bonds, hence a sort of partial yield curve control. other participants, must not be ready to give up on bonds yet, especially the institutional investors who are looking at more short term gains rather than long term. You can still make money on bonds in the short run betting on interest rate fluctuations.

[zie]

That is our current trajectory, but anyone with a modicum of common sense knows there is an end.

The question, which was what my comment was about, is how we eventually get to the end. We either buck up and pay it, or we crash and burn.

I'm betting we buck up and pay it, and just have a very bad decade or three, while taxes go up and spending goes down.

[metaphor]

> And when the US pays interest on that debt, it just pays it to the federal reserve which then sends it back to the US.

Uhh yeah, about those remittances[1]...

https://fred.stlouisfed.org/series/RESPPLLOPNWW