Why the US can't "burn" debts

2024 Author: Seth Attwood | [email protected]. Last modified: 2023-12-16 15:55

Why can't the United States just print “one hundred thousand million” (although no, just that much they can, in real life they need two orders of magnitude more), devalue their national debt and leave the whole world with a nose?

Here, some colleagues and even more sofa experts, only through a misunderstanding working as taxi drivers and loaders, and not as heads of the Central Bank, quite regularly expressed the opinion that the United States can solve the problem of its huge external debt by launching an inflationary scenario, that is, by printing a lot of dollars and devaluing its currency, and hence debt.

This topic is relevant as long as this huge debt exists. But a few days ago, the head of the White House's budget committee, Mick Mulvaney, refreshed its relevance, saying that despite the record sequestration (cuts) of the US state budget (they cut social services, food stamps, insurance medicine and much more), money runs out faster than planned.

And they end because the revenues of the US state budget have fallen significantly - the state has begun to receive fewer taxes. And this happens because the American economy is not growing, as the liberals are trying to rub in on us, but quite the opposite (as evidenced by the data on transportation and a number of other parameters). As Ruslan Karmanov says, "Success is so successful."

And since the money in the US state budget is running out, this means only one thing - Congress will again have to raise the public debt ceiling, and quite significantly. Accordingly, the cost of its maintenance and other ensuing consequences will also increase.

Why can't the United States just print “one hundred thousand million” (although no, just that much they can, in real life they need two orders of magnitude more), devalue their national debt and leave the whole world with a nose? There are a number of important reasons for this.

1. The US Treasury does not print money at all. It prints promissory notes (treasuries), and bankers from the Federal Reserve System (FRS) print dollars, who buy these promissory notes for resale and make money on it. That is, the American government is not alone in printing money.

2. But the Fed is not directly interested in the depreciation of dollars, as well as in the depreciation of the national debt. Because he feeds on it, this is his main item of profit.

They themselves have more than 4 trillion US debt on the balance sheet, and who will voluntarily devalue assets by that amount? I do not know such. It's easier to arrange a coup or to start a war.

3. Neither the largest American banks, nor the major players on Wall Street are interested in a significant depreciation of the dollar. They manage their favorite derivatives bubbles (they have not gone anywhere, just changed the name) in the size of 50-10 billion in each of the ten largest US banks.

And now imagine that someone comes and says, "You now own not half of the planet's money (albeit virtual), but only 5%." What will happen then?

If someone really tried to do this, it could be called the Great Anti-Fund Revolution. But I'm afraid any American president who even mentions it will end up worse than Kennedy. They will shoot him not just with a rifle, but at least zhahnut "Tomahawk", for reliability. And then they will blame the North Koreans (fortunately, the Americans have a lot of experience in this).

No guys, I don't believe in the possibility of an inflationary scenario for the US. I have already grown from the age when they believe in fairy tales.