Friday, February 04, 2011

The dollar: we’re screwed
So what in God’s name is the answer to all this? How will the US’s finances be handled? There are only two ways that I can come up with:

The first is to default, just declare that the nation is dead broke and it can’t meet its obligations. That would be tantamount to admitting that the US is less than a third-rate power, a dying banana republic. Unthinkable.

The second way would be to devalue the currency to the point where obligatory dollar debts would be financed or paid off with dollars equal to pennies or nickels.
From LRC.

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