Hacker News new | ask | show | jobs
by Uchikoma 4957 days ago
With so few people - in Germany at least - having their assets in Gold etc. but in bank accounts in $,EUR,... I assume most people trust the currency.
1 comments

Doesn't Germany hold a huge amount of gold? Additionally, the only euro country not collapsing on itself?
€144 billion currently it is assumed, but no one really knows as no one has counted - and weighted - the gold for a long time, at least the Govt didn't. But 144B is not nearly enough to provide any currency stability.

[edit] "But not even the owners are allowed to view their own gold. According to the Federal Audit Office report, the Fed explained that "in the interest of security and of the control process" no "viewings" are possible." http://www.spiegel.de/international/germany/german-politicia...

The US Dollar area (i.e. the US) has come closer to default than the Eurozone.
If by "default" you mean "voluntary default", perhaps yes, in the context of the debt ceiling debate.

However, since the US government cannot be forced into default - after all, the US government runs the USD system, and all its obligations are denominated in USD - this is all just political posturing.

It's kind of depressing how effective this posturing is. It's a testament to the terrible state of public education about fundamentals of our monetary systems.

yep. But can the largest military power really default?
Easier than anyone else, I'd say.

"Hi Everyone, POTUS here. About those treasury bonds a lot of you are holding... we're not going to pay interest on them. Or pay back the princiapl. Ever. On a totally unrelated note, here are some pictures of our 11 carrier strike groups. Impressive, aren't they?"

Argentina is a serial defaulter yet investors still lend money to the government there.

If the U.S. decided to completely default on it's debt it would be more destructive to the U.S. economy since the majority of the debt is held by U.S. citizens & institutions. Insurance companies & banks would collapse instantly since the a very large percent of their asset bases would be wiped out.

We (meaning U.S. citizens) owe more to ourselves than to any foreign entity. Default is, at least right now, a political non-starter.

"Hey, POTUS, you got us. BTW, we'll never lend you money again. Or vote for your party again."

The US would never need to default on its debt, since its debt is in USD. Worst case, it would just print more money, leading to inflation.

Ask the Germans and the British before the WWII.

They were the largest military power at the time, Germany in land, British Empire(India,Pakistan, Afghanistan, Ethiopia...) on the sea.

They started getting in debt and a little country called United States became the biggest creditor of the world.

They they killed each other in a stupid war trying to reign supreme, and someone else did.

Now this someone else had started thinking their power will be forever. We will see...

Well the European Union is the largest economy by GDP (not sure of eurozone). Can it 'collapse'? If it can collapse, what makes you think the largest military can't?
The only? Greece may be collapsing. To say that other Euro countries are also collapsing would at this point be hyperbole.
Spain's economy is headed for a depression, Ireland's credit is shot after their bailout, Portugal collapsed almost immediately and is suffering high unemployment even after a bailout, Cyprus's credit rating is junk and they've applied for a bailout. So it's not just Greece. Several other countries were headed for trouble but seem to have things under control now: Italy, Belgium, France, the UK, Switzerland, Germany, and Slovenia.

Source: http://en.wikipedia.org/wiki/European_sovereign-debt_crisis

That’s not collapse in any sense of the word.

Even if I were to agree with you on the collapse, that’s not all Euro countries. Germany, for example, had never any problems or trouble that could by any sane person be described as collapse.

I think describing a recession or even depression as a collapse is wrong.