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Does anyone have a prediction on what happens when the US becomes insolvent?

Posted on 2/12/24 at 12:43 am
Posted by tgerb8
Huntsvegas
Member since Aug 2007
5997 posts
Posted on 2/12/24 at 12:43 am
Let's say the national debt is the thing out of the possible 15 that destroy this country.

what happens?
is USD suddenly valueless, even in US?
stocks crash? why?
banks close? why?
food dries up or is just "too" expensive?

Would it be worse than great depression? Why?

Do the investment gurus around here see a hedge for that beyond "physical assets" (food, water, protection, etc)?

I've pushed my financial advisor on that several times.... but he's a steady guy basing things on historical performance not hypothetical future events.
Posted by M. A. Ryland
silver spring, MD
Member since Dec 2005
2051 posts
Posted on 2/12/24 at 12:52 am to
War
Posted by Tunasntigers92
The Boot
Member since Sep 2014
23658 posts
Posted on 2/12/24 at 12:52 am to
National debt will not be what brings this country to it's knees, the entire topic is more or less just a talking point.
Posted by POTUS2024
Member since Nov 2022
11399 posts
Posted on 2/12/24 at 12:58 am to
Massive contraction with civil unrest is the most likely outcome.

If no one wants to buy US debt then the government either prints the money to keep things going, or everything starts getting cut.

There is only one guarantee - the govt will choose a course of action that protects itself and hoards more power for itself. That pretty much means more power for government and less freedom for the People.
Posted by davyjones
NELA
Member since Feb 2019
30246 posts
Posted on 2/12/24 at 2:19 am to
Seems like in that particular scenario, the thing they be shooting for is keeping power at all, i.e. staying in power. A state of nationwide civil unrest isn’t the ideal time to be making jack moves to seize and consolidate even more power. If dire enough a situation, they might be on the receiving end of said jack moves.
Posted by POTUS2024
Member since Nov 2022
11399 posts
Posted on 2/12/24 at 2:29 am to
quote:

A state of nationwide civil unrest isn’t the ideal time to be making jack moves to seize and consolidate even more power.

That is what they will do, however. It's what governments always do - sometimes they do it thinking they can be the solution that everyone needs. Most of the time they are just looking out for themselves thinking they will mobilize all the people with badges and guns to protect them, secure power etc. Their calculus always mistakes the disparity between them and the random citizen for the differential separating them and the population overall.

quote:

If dire enough a situation, they might be on the receiving end of said jack moves.

Yep. Study the way most insurgencies go. Things get tough, government cracks down, government turns more people against the government, resistance grows, government can't control things and provide the necessities like peace / water / trash removal etc, more and more people decide the existing government is not the answer and then you get an inflection point and it's all over.

ETA - USMC Small Wars Manual, David Galua's Counterinsurgency book, and Kilcullen's 28 Articles are all things you can find online that help illustrate these points and present this type of information.
This post was edited on 2/12/24 at 2:31 am
Posted by Penrod
Member since Jan 2011
39606 posts
Posted on 2/12/24 at 2:43 am to
quote:

A state of nationwide civil unrest isn’t the ideal time to be making jack moves to seize and consolidate even more power

That’s EXACTLY the time. That’s when Caesar did it; that’s when Napoleon did it; that’s when Hitler did it; and that’s when Lenin did it.
Posted by davyjones
NELA
Member since Feb 2019
30246 posts
Posted on 2/12/24 at 3:03 am to
Guess what though - none of their populous was strapped with machine guns and .50 cal rifles and everything in between. Sorta evens the playing field a bit better, eh? Again, if it got to that extreme level of course. Question becomes when and how it could get to such a level.

I think there is a possible event in each individuals’ lives that could/would easily turn a normally mild mannered man into a beast taking up some serious arms: some significant threat comes along that leaves you cornered, and your only choices are either perish (or if not literally perish, you may well wish you were) -or- literally fight for your life (and that of your family, if applicable). Perhaps a crisis that leaves you with literally nothing. A true existential crisis. Plus on top of that, they talking about trying to separate you from your family or some shite. I know I’d turn beast, real fast. A flesh eating beast. It’s not all that unrealistic a potential scenario.
This post was edited on 2/12/24 at 3:05 am
Posted by Bard
Definitely NOT an admin
Member since Oct 2008
51792 posts
Posted on 2/12/24 at 6:17 am to
quote:

Let's say the national debt is the thing out of the possible 15 that destroy this country.

what happens?
is USD suddenly valueless, even in US?
stocks crash? why?
banks close? why?
food dries up or is just "too" expensive?

Would it be worse than great depression? Why?


This is all a HUGE unknown, so anything is just speculation (with some using history as a framework for what may happen). One of the biggest aspects (to me) is that the USD is the primary world reserve currency and as such more international transactions are done with the USD than any other currency - by far.

This means much (if not all) of the international community would take a massive economic hit as well.

So if it were to happen, it might start with the Treasury missing an auction (which nearly happened last Fall). For this to happen, the Fed would have to not be able to (or just refuse to) buy up the excess debt. With so much of the world's economy impacted by the value of the USD, it may even take two successive missed auctions but the first one would still take a big toll on the USD's value internationally.

Another big aspect of this is that the federal government would then have to figure out how to operate without the funds which would have come in had that auction not failed. Instead of stories about a "government shutdown" due to not passing some sort of spending package, we would finally be hearing about a "government shutdown" due to not being able to auction off debt. The news would, of course, then complain about "how could this happen" when it's been a growing concern they should have been watching for at least the last twenty years.

From this, we would likely see prices skyrocket like nothing we've ever seen before. Interest rates would have to rise to the point where literally no one would be able to borrow money (rates over 20%, perhaps?) in order to attempt to tame inflation. That would mean massive layoffs and business (and bank) failures while also social programs from the state and federal governments would dry up.

If this worked, it would take at least a year of rates being that high before we saw a significant slowdown in inflation. Farmers live largely on borrowing for planting, then paying loans back after planting. As we saw in the 80's with Volker's rates, many farms would likely go under which would mean less food at the local grocery stores. As people got more frustrated and hungry while seeing the government "doing nothing to help us", civil disobedience would increase.

All of this would likely force changes in how people view things and those changes could run all sorts of gamuts. Violent crimes may cause a push for greater law enforcement, but the lack of state and local tax revenues may cause too many cops to be fired to enforce the law (which may then cause citizens to take self-defense up a notch). Lack of social program money keeping poor neighborhoods afloat may force some in them to become more self-sustaining and personally responsible, some may dry up as people there move just to find a place where they can get food.

All of that is just one possibility.
Posted by TerryDawg03
The Deep South
Member since Dec 2012
15772 posts
Posted on 2/12/24 at 6:41 am to
Hyperinflation like the Weimar Republic followed by a bunch of angry foreign debt holders who could start a war over it.
Posted by tigersbh
Baton Rouge
Member since Oct 2005
10311 posts
Posted on 2/12/24 at 6:45 am to
Hyperinflation to the point that we cannot afford much of anything, including food. We join with the new economic/political/religious system rising in Europe. Just take the mark (666-related microchip) and he will be able to buy and sell again, per Revelation 13:16-17.
Posted by aTmTexas Dillo
East Texas Lake
Member since Sep 2018
15188 posts
Posted on 2/12/24 at 6:47 am to
Confiscatory taxes. Half your 401s and IRAs.
Posted by glassart
Member since Apr 2021
301 posts
Posted on 2/12/24 at 6:53 am to
quote:

I've pushed my financial advisor on that several times.... but he's a steady guy basing things on historical performance not hypothetical future events


No offense intended but your guy went into finance because he is a color inside the lines personality type.

Grid Independent Systems.

Before he died T Boone Pickens was buying up water rights. He was ahead of his time but he saw an expiration date on our form of DEI culture delivering the basics like trash pickup and clean water.

My hypothesis based upon current trends is that the elites will release multiple slotted viruses based on genetic data from 23&Me and other bio weapon umbrella corporations. They will hunker down for six months to a year while allowing mass depopulation of locked down urban cores.

Posted by Houag80
Member since Jul 2019
9263 posts
Posted on 2/12/24 at 6:54 am to
This is the exact scenario of how it would play out. All of the dictators Penrod mentions did not have millions of their citizen normies heavily armed and not hesitant to kill if provoked.
Trying to hurt their family or take their assets would do just that.
It would be brutal, no question; however, there are more citizens than the current US military.
Ultimately, the government would fall and become something else...much like everyone before it in history.
Posted by ManWithNoNsme
Member since Feb 2022
442 posts
Posted on 2/12/24 at 7:01 am to
That’s why I have a frick ton of ammunition. All these preppers. It’s going to be Mad Max. The dollar will be worthless. Guns and ammunition will rule.
Posted by Toomer Deplorable
Team Bitter Clinger
Member since May 2020
17870 posts
Posted on 2/12/24 at 7:23 am to
quote:

National debt will not be what brings this country to it's knees, the entire topic is more or less just a talking point.


Our nation’s debt-financed fiat currency system is the funding mechanism for the Welfare-Warfare State and is the wellspring of the deepening crisis. Fiat currency is not backed by any commodity but instead derives it’s value from government fiat or decree.

Since fiat currency is an inconvertible form of money, it is by it’s very nature a currency of unlimited supply and thus is intrinsically prone to currency debasement. The history of all fiat currencies demonstrates that fiat currencies ultimately will return to their intrinsic value, which is the paper they are printed upon.
This post was edited on 2/12/24 at 7:27 am
Posted by udtiger
Over your left shoulder
Member since Nov 2006
99099 posts
Posted on 2/12/24 at 7:30 am to
Becomes?
Posted by loogaroo
Welsh
Member since Dec 2005
30972 posts
Posted on 2/12/24 at 7:34 am to
Posted by ronricks
Member since Mar 2021
7103 posts
Posted on 2/12/24 at 7:34 am to
The next Great War will be Illegal Immigrants vs American citizens. Wait and see.
Posted by Mike da Tigah
Bravo Romeo Lima Alpha
Member since Feb 2005
58931 posts
Posted on 2/12/24 at 7:34 am to
I’ll take a stab at it.

330 million people, the majority of whom don’t know how to cook, can, preserve, and sustain their life without daily and weekly trips to a grocery store or restaurants for food, who live in houses not conducive to living without electricity and other basic services,

In difference to the Great Depression, most people simply do not have the basic skill sets to survive something of that magnitude or the local infrastructure to support themselves, which is why the only real chance people have is to get out of the cities with the quickness.

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