If they are smart they will quietly reduce their exposure to our currency. After all, our wild spending habits at not just a government level, but a corporate and a personal level, show no signs of slowing down.
And since the debt we create is added to the money supply, yes many people don't understand this: anytime one uses a credit card, gets a loan, applies for a mortgage, they are creating money out of thin air.. not the federal reserve. The federal reserve only needs enough money on hand to meet the reserve ratio. They create money as a result of our demand for it.
(We have a debt based, fractional reserve currency, not a fiat currency.)
With that added debt in our money supply helping prop things up for another few months, any attempt to pay off such a massive debt would result in a recession or worse, since a debt paid off is money taken out of the money supply, not able to prop up our ailing economic system.
But are you kidding? Americans won't try to pay off their debts. They will increase their debt load until they have to file bankrupcy, as will the government. Our only option at this point is to devalue the currency.. there is no other alternative... whether foreigners dump our debt, or we decide to voluntarily devalue, we must devalue, the debt is too much for us to handle.
Hyperinflation.. that is our future. And one can profit in advance of a dollar decline by purchasing commodities cheap and selling them later on. Silver and land are my favorites. Gold, and hell, even natural gas or oil would work.
So are you saying that foreigners will continue to allow US citizens to live way beyond their means forever? And this when the US President is detested in much of the world.
Even Zeev says that a massive global recession is inevitable. Just a question of when. And how bad inflation gets before that happens.
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