US will never default, Vice-President Biden tells China

[alp227]

Source: BBC News

United States Vice-President Joe Biden, who is visiting China, has said the US would never default on its debt.

In a speech on the last day of his visit, he reiterated that China's large holdings of dollar assets were safe.

His trip comes amid mounting tension between the two over America's debt.

Chinese officials have criticised the political row in the US over raising its borrowing ceiling, and expressed concern over the recent downgrade of the country's credit rating.

Read more: http://www.bbc.co.uk/news/world-asia-pacific-14605974

[lib2DaBone]

1. What about the $30 Trillion in Derivatives waiting to explode?

...never mind.. go on vacation to Martha's Vinyard and we'll worry about it later.

[on point]

2. Devaluation of the money IS a default.

Saying we can pay back the nominal (named) amount of money, but not the real (not deflated) amount is the same as a default. The rest of the world, including the Chinese know this and are not fooled. Ron Paul and others are right on this. Hence the rise in the price of gold. Or another way to look at it, gold is not going up, but the dollar is going down.

Printing our way out of the debt is not really paying off the debt at all. Watch out because the pols want to do the same thing to benefits. Make benefits rise less than real inflation and you give in fact reduced payments. Magic.

Truth really is our debt is unsustainable, but it is the right wing corp military that got us in this mess. I say make THEM pay it back by increasing their taxes back to 1950's levels (90%) until THEY have paid it off..

[MJJP21]

3. Here is why

The US can't default because it prints its own money. Now for all of you that think the dollar should be backed by gold here are some facts for you to consider. Geologists generally agree that in all of mans history about 165000 tons of gold has ever been mined. To pay our debt it would take about 300000 tons of the stuff to accomplish that but that was when gold was around $900.00 an ounce. Still you can see that there is not enough gold on the planet to back our currency nor any other country's currency. That being said IF our currency had been backed by gold all along much of what you see out your window would not exist as there would not have been enough money to make it happen.

[Fool Count]

6. Technically, not all US Government obligations are in USD.

For instance, US owes gold to other governments which placed some of their gold reserves in US
for safekeeping. US may also owe debts to other countries denominated in Special Drawing Rights (SDR),
which represent a basket of world currencies. So not all US obligations can be satisfied by printing
dollars and, in principle, US can default. Secondly, the point about US debt exceeding the total
amount of gold in the world at its current prices can just as well serve the argument that gold is
massively undervalued and its price should keep growing for a long time. To say that there is not
enough gold in the world to back any currency without specifying any particular exchange rate is
nonsensical on its face - obviously at the right price there is enough gold to back all currencies.
It is even more ridiculous to say that much of our material world wouldn't come into existence if
Nixon didn't end the gold standard in 1971. For much of human economic history we somehow managed
to operate with gold-based monetary systems without being impeded in our development by "shortage"
of money. There may be some other valid arguments against going back to the gold standard by I don't
see them in your post.

[Ash_F]

4. He then added "please don't beat me! :("

:evilgrin:

[elocs]

5. No China, you'll get your money even if we have to screw over poor & senior citizen Americans

to do it.

[russspeakeasy]

7. Biden says a lot of stupid things..