FT - US could default on its debt

[cd27]

The whole US / China issue is at the forefront of the economic crisis, interesting article from Martin Wolf below,

Debtor countries will either export their way out of this crisis or be driven towards some sort of default

FT.com / Columnists / Martin Wolf - It is in Beijing?s interests to lend Geithner a hand


Creditor countries are worrying about the safety of their money. That is what links two of the big economic stories of last week: Chancellor Angela Merkel’s attack on the monetary policies pursued by central banks, including her own, the European Central Bank; and the pressure on Tim Geithner, US Treasury secretary, to persuade his hosts in Beijing that their claims on his government are safe. But are they? The answer is: only if the creditor countries facilitate adjustment in the global balance of payments. Debtor countries will either export their way out of this crisis or be driven towards some sort of default. Creditors have to choose which.

Germany and China have much in common: they have the world’s two biggest current account surpluses, at $235bn and $440bn, respectively, in 2008; and both are also powerhouses of manufactured exports. They have, as a result, suffered from the collapse in demand of overindebted purchasers of their exports. So both feel badly done by. Why, they ask themselves, should their virtuous people suffer because their customers have let themselves go so broke?

Full article link above

[Geckko]

And in other news:

Boy on pogo stick could bounce to the moon.

Monkey with typewriter could complete works of Shakespeare.

[142857]

And in other news:

Boy on pogo stick could bounce to the moon.

Monkey with typewriter could complete works of Shakespeare.

And bears could shi[size=2]t[/size] in the woods. .

A crazy thought, but maybe observe the content of this news to make relevant assessments.

[AngloIrishLad]

Arent we going to die from piggy flu before all this happens?

[Dreaded_Estate]

Can't see why the USA would default when it can just devalue the $

[seenitallb4]

Good article though, the key point being that if China et al want their assets safe, they have to begin to consume more and allow the US to export its way out of the crisis. Safe Assets or Continues massive surpluses- cant have both.

[Mossy Heneberry]

America is devaluing their dollar by printing money out of thin air. Eventually the Chinese for example, will stop buying treasury bills when they see their existing holdings deplete in value.

This of course will shock the Americans out of their consumerist mentality and maybe they will start to getting back to exporting again, balancing their budgtes and reducing their deficits?

[cd27]

Can't see why the USA would default when it can just devalue the $

It's effectively the same thing

[cd27]

Peter Schiff on CNBC, debating the issues,

[ame=http://www.youtube.com/watch?v=jzCsXA9xjpg&feature=related]YouTube - PETER SCHIFF DEMOLISHES CNBC STAFF MAY 22ND 2009!!!!!!![/ame]