You economics experts - please explain this to me : LUSENET : TimeBomb 2000 (Y2000) : One Thread

There is a lot of interesting speculation by knowledgeable persons on this site regarding the future of the stock market and the economy. This is not an area of great expertise for me, so I'm interested in your opinions about the following: Early in his term Clinton restructured the national debt and the loan comes due in one year after his term expires, early 2002. At that time we can not pay it, and do not have the money even for the interest payments. If the fed goes the fiat route, the dollar will collapse. There is not enough gold to cover the loan, even if they confiscate all gold from the citizens. They can't just restructure the loan yet again because the interest is too high to pay. The only economics expert I know ( Stanford MA in economics) says we'll be selling those banks ( inc. London, Germany, France) our wilderness and National lands to pay it, there is no other option but for the USA to declare bankruptcy. So, what do you forsee when the loan comes due in two years? Can we really pay off our debt completely with parks and forests and wilderness? If not, how can the economy NOT collapse at that point? How could we keep manipulating the world to keep accepting our dollars? How can things continue after early 2002 when our national debt comes up for payment?

-- lyn hettler (, January 15, 2000



Great information. I know that I always make my decisions based on advice from a Stanford MA in economics. 80).

Best wishes,,,


-- ZiX4Y7 (, January 15, 2000.

lyn, Don't worry, things aren't as bad as all that. National Governments (the US of A included) finance the cast majority of their debt via fixed income instruments (Gov't Bonds). These bonds are managed (and, yes, sometimes mismanaged) by the central banks on one side and the investment bankers (i.e. Wall Street) on the other side. The United States debt is financed through billions of dollars worth of these debt instruments. The expire and roll-over all the time. Many are sold as 30-year bonds. There is no one sungle "loan" due in 2002. On the other hand, that is not to say that the $US will not become less attractive to global investors. If RC's and/or Downstreamer's oil price rises come to pass, if the Japanese banks don't continue to tread water (they're getting really tired, folks) and if European money starts embracing the Euro, the $US and the US economy could may very well have just enjoyed it's most prosperous times ever. This decade could very well see Americans on the outside looking in.

-- Paranoia Will (, January 15, 2000.

Why do you think Clinton is currently involved in the biggest Federal land grab of the decade? Via nationalizing every piece of land he can.

-- Porky (Porky@in.cellblockD), January 15, 2000.

I don't know, Porky, what do you think? To pay off "the loan" two years after he leaves office?

-- Paranoia Will (, January 15, 2000.

Paranoia Will:

You haven't been on this forum long enough. There are certain people that you respond to and certain people that you ignore. You will need to learn the difference.

Best wishes,,,

-- Z1X4Y7 (, January 15, 2000.

Z1X4Y7, thanks for the tip. You're right, I'm not only a rookie at this forum, I'm a rookie to all Internet Forums. I've been lurking this one for a week now. Really interesting at times, really funny at times and really a waste of time at times. Thanks again!

-- Paranoia Will (, January 15, 2000.

Let's look at this from a another perspective: 1) ALL major governments use a fiat money system. 2) ALL major currnecies are dependent upon each other for stability and ESPECIALLY on the dollar. 3) Although 39% of our debt is owed overseas (a conservative figure), many of these countries aslo owe the US and each other.

Keeping this is mind what you will see is one of several things a) Faced with worldwide economic collapse if the US defaulted, the new president will restructure the debt once again. (Hint, Clinton's not the first) b) The issue will be vrey quietly handled internationally by floating the US more loans- again, not the first time this has happened inthis country or with countries that owe us money. c) Someone decides a global economic crises would be a perfect chance for them to grab for power in their country first, and then surrounding ountries, so refuses to take part in either of the above options, facilitating a collapse. Again this type of power hungry attitude has reared it's ugly head in the past, but occured after the collapse- One of the root causes of WWII.

Of these options, the first two are the most likely. Although fiat money systems have always collapsed in the past, never in the history of our planet has so much effort been put forth to sustain such a system. The biggest resource needed for such a system to continus is the confidence of the general public, which because of the current economic conditions is pretty high.

Remember, the US is NOT the only ocuntry in the situation, and it behooves those in the financial seats of power to prop up the status quo for as long as is by any means possible.

-- Sam (, January 15, 2000.

Salve Lyn.

One of the interesting thing about (most of) the National Debt is that it is basically owed to banks.
If it came to it, it may be that we would see a renewed interest in the tatics employed in Tiberius' time in dealing with the bankers of the day. Mostly the bankers agreed to forgive the debt.
The smart ones negotiated concessions before capitulating. The dumbs ones mere (de)capit (ulated). It seems great numbers of bankers are very ameniable if a few are publicly beheaded.

Realistically, it is a tangled, incestuous arrangement between the banks and the gov't but it may be moot. Massive inflation makes paying the debt less painful as the money is worth less. As we are not a nation of savers, few will lose their savings when congress once again starts printing money.

Also there is repudiation.

Social unrest and debt relief make for wholey new political situations.

We could also nationalize the banks and then forgive ourselves of the debt.

And if history is a guide, something (usually a war) always comes up to delay payment on any nations debt.

-- pliney the younger (pliney@puget.sound.wind.storm.tommorrow), January 15, 2000.

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