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Thread: Catastrophic inflation (death of the dollar)

  1. #11
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    Quote Originally Posted by Ryanferr View Post
    Thanks buddy. Good to be back.



    Trust I'm responding to you in good faith and not trying to be a jerk, but I would respectfully disagree. IMO the dollar's value comes from the system that governs it. It is a fiat currency through and through, so there is nothing tangible backing it - not gold nor any physical assets. Beyond interest rate expectations, one holds the USD over other currencies due to fact it is maintained responsibly by the US government / Fed (thus will reasonably preserve its purchasing power) and gives you access to the US economy (can be used for purchases of valuable goods and assets). In this context it's easy to understand why one would want to hold USD over the Venezuelan bolívar (not responsibly maintained, won't hold its value / PP, doesn't provide access to an attractive underlying economy). In the case of the USD one doesn't find them attractive because in a default scenario one has a claim on the national assets of the US economy, but you don't. It's very much not backed by any assets.

    Lastly, in a scenario where we sold assets, these assets would likely be sold to the private sector of the US economy. Land, mineral rights, and oil drilling rights would be high value targets for US companies and investors. On the flip side, it's certainly possible we sell Hawaii off someone like the French much like they sold us Louisiana, but I don't think Hawaii dramatically impacts the value of the dollar, particularly if we sell Hawaii at a very attractive price and pay down a significant portion of debt. We'd lose some GDP, but again, it would depend on what the corresponding debt reduction would be.
    Well, let's hope we stay so amazingly responsible.

    Ag guy
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  2. #12

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    Quote Originally Posted by Ryanferr View Post
    ...particularly if we sell Hawaii at a very attractive price and pay down a significant portion of debt. ...
    Sell Hawaii? I hadn't heard that one before. Things would have to be pretty bad for that to happen. The country would have to be collapsing.

  3. #13

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    We'd be better off selling California.
    American Legion Preamble: https://www.legion.org/preamble

  4. #14

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    Quote Originally Posted by Ryanferr View Post
    ... IMO the dollar's value comes from the system that governs it. It is a fiat currency through and through, so there is nothing tangible backing it - not gold nor any physical assets. Beyond interest rate expectations, one holds the USD over other currencies due to fact it is maintained responsibly by the US government / Fed (thus will reasonably preserve its purchasing power) and gives you access to the US economy (can be used for purchases of valuable goods and assets). In this context it's easy to understand why one would want to hold USD over the Venezuelan bolívar (not responsibly maintained, won't hold its value / PP, doesn't provide access to an attractive underlying economy). In the case of the USD one doesn't find them attractive because in a default scenario one has a claim on the national assets of the US economy, but you don't. It's very much not backed by any assets...
    While I agree with what you say, I would like to add that, like the half shekel of biblical reference, this fiat derives value from the fact that it is accepted as payment for taxes due.

  5. #15

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    Quote Originally Posted by LongDonSilver View Post
    We'd be better off selling California.
    Paying a disposal fee to get rid of it, may even be a good investment.

  6. #16

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    Shhh... Secret. The debt's not being paid back. Inflation is progressive/pervasive, if your not paying attention it creeps up on you (boiling frog).

    "money to pay off the debt"

  7. #17

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    Quote Originally Posted by SilverPalm View Post
    Paying a disposal fee to get rid of it, may even be a good investment.
    California is ours...theres nothing wrong with the real estate.

    Load all the liberals onto barges and set them off to sea.

    Problem solved.
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  8. #18

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    Quote Originally Posted by everything1 View Post
    Shhh... Secret. The debt's not being paid back. Inflation is progressive/pervasive, if your not paying attention it creeps up on you (boiling frog).

    "money to pay off the debt"
    rampant inflation is of course the road of diluting paperdebt. The problem is they make more debt than the diluting procédé can nick....

    Golditiki2+++

  9. #19
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    Quote Originally Posted by LongDonSilver View Post
    We'd be better off selling California.
    Sell both to the Chinese and they'll build a bridge and fast train between the two.
    Who are the righteous? ....Markpti

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  10. #20

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    Quote Originally Posted by Dmitri View Post
    Sell Hawaii? I hadn't heard that one before. Things would have to be pretty bad for that to happen. The country would have to be collapsing.
    It's just a hypothetical, but there is plenty of historical precedent. We purchased the Louisiana Territory from France when the French Treasury was gearing up for war with Britain, for example. The sale was for reasons beyond just shoring up the Treasury, but that was certainly an aspect of it and part of the purchase price included the forgiveness of some French debt. There's nothing theoretically stopping us from doing the same thing now in the present day. While it's a common trope to complain about the US debt, people forget that 1) the upper bound of the fiscal debt load is significantly higher than many had previously thought; and 2) the US remains asset rich and has other forms of repayment beyond tax receipts.

    Quote Originally Posted by SilverPalm View Post
    While I agree with what you say, I would like to add that, like the half shekel of biblical reference, this fiat derives value from the fact that it is accepted as payment for taxes due.
    The ability to pay taxes with USD certainly helps and plays a role.
    The answers are in the data

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