Do you think the US will default on its debt?

Another poll.

NEVER! Damn the torpedos, full steam ahead!
No, but will get a downgrade
Default in less than 1 yr
Default in less than 2 yr
Default before Obama's term is up
Already in technical default

 

Board is f'd up - the poll thing didn't work.

 

The Democrappers will continue steering the economy into default. I give it six years.

 

I think we avoid a "technical default", and instead devalue our currency for a huge haircut off of the debt.

 

Other countries are at risk, it will push everyone to act with carefullness.

China, gulf states and commodities driven countries may have enough to weather the storm, but if they profit too much they risk having to clean it up later.

So unless Jintao si thrown out of the presidential seat by military coup..which would be very doubtfull..there won't be so much pressure on Obama to take excessive risk.

Infrastructure are at risk, for the bankers to refuse credit would be inviting for sabotage in their own business ventures.

There is tightness in many very strategic commodities (uranium, platinum, arable lands and Iron).

The continued double-problem (low-growth and tight supply) will provide a buffer for everyone to act with moderation.

They may try, but it would be risky of them since most people would be either jealous of their excess liberty or paranoid they would create a domino effect.

 

How may china react to this according to you?

 

Countries with foreign debt default.

The US debt is mainly in US dollars, they cannot default on US $ debt, they just have to issue more $$$$.

Inflation will have to go up to deflate themselves out of this problem in the coming years though.

 

You loan a guy $1. His livelyhood goes down the drain. would you rather get paid back .75 or nothing at all?

 

The food and agriculture administration (FAO) is predicting a new wave of high food price next summer (2009). Farmers are expected to cut on planting to adapt to lower growth.

That beside China massive investment in infrastructure, will provoke inflation.

Note: If china starts investing now around 200 billions, it could reverse the trend..but it would be less effective since it would be too fast implemented (bureaucracy & gridlock due to sudden demand)

What then?

I would look at China-US trading military technologies to level the playing field.

Then this will strenghten Chinese allies in the middle-east, Africa and South america.

The solution would then lie in resolving doha or promoting diverse monetary union around the world.

 

So you think they don't have the guts to ask for something back?

I mean to finance the .25 they lose..