Government Debt Default & Currency Devaluation Confusion

[Aerosmith]

I don't see how the two relate to each other. Can someone enlighten me on this issue?

Thanks all.

[cabdallah252]

large government debt -> people lose faith in the currency of that country -> leads to currency devaluation

[Unclebin-]

People start selling there foreign currencies.... Look at Iran, Venezuela, and other leftist governments.... They want to sell all there US reserves because the US government is in 9 trillion dollars debt and thats not good for there reserves....

China, Arab states support the US and have kept the greenback afloat.... But China could drop "DOLLAR NUCLEAR BOMB" and start selling there trillions of US dollar reserves if america every fukks with China.

[cabdallah252]

[quote="Unclebin-"]People start selling there foreign currencies.... Look at Iran, Venezuela, and other leftist governments.... They want to sell all there US reserves because the US government is in 9 trillion dollars debt and thats not good for there reserves....

China, Arab states support the US and have kept the greenback afloat.... But China could drop "DOLLAR NUCLEAR BOMB" and start selling there trillions of US dollar reserves if america every fukks with China.[/quote]


The euro will become the new universal currency, I already changed my USD savings account into euros 1 year ago! it started against the dollar few years ago 1 euro being worth less than a dollar now its nearly 1.5 dollar and probably going to hit 2 dollars soon...

[Unclebin-]

[quote="cabdallah252"][quote="Unclebin-"]People start selling there foreign currencies.... Look at Iran, Venezuela, and other leftist governments.... They want to sell all there US reserves because the US government is in 9 trillion dollars debt and thats not good for there reserves....

China, Arab states support the US and have kept the greenback afloat.... But China could drop "DOLLAR NUCLEAR BOMB" and start selling there trillions of US dollar reserves if america every fukks with China.[/quote]


The euro will become the new universal currency, I already changed my USD savings account into euros 1 year ago! it started against the dollar few years ago 1 euro being worth less than a dollar now its nearly 1.5 dollar and probably going to hit 2 dollars soon...[/quote]


Your right.... The Euro will be the next universal currency...> But thats not good for imperialist America... There world stranglehold will drown.... There trillion dollar wars will not be paid by stupid arab states who literally buy american debt.

[cabdallah252]

[quote="Unclebin-"]


Your right.... The Euro will be the next universal currency...> But thats not good for imperialist America... There world stranglehold will drown.... There trillion dollar wars will not be paid by stupid arab states who literally buy american debt.[/quote]



soon even in bosaso they will stop printing fake dollars but start with these lol

http://image.guardian.co.uk/sys-images/ ... 0euror.jpg

[Aerosmith]

Thanks Cabdullahi and Unclebin but I think I kinda phrased my question wrongly... I wanted to know how does defaulting on government debt(In Case of US, If US were to default on its Treasury long term bonds, the 30 yrs bonds) force a country to automatically devalue its currency. How are they directly correlated. Is does not just add me or maybe I am just too damned dumb or tired.

Help.

[Unclebin-]

Aerosmith

The US will go into recession if they can't pay back there debt (and if no Stupid arabs and Indayar stop buying their debt).... Which long term means

Recession------> Depression...

The great depression is coming...


Cabdallah

In Bosaso they already have fake euro making machines

[cabdallah252]

[quote="Unclebin-"]Aerosmith

The US will go into recession if they can't pay back there debt (and if no Stupid arabs and Indayar stop buying their debt).... Which long term means

Recession------> Depression...

The great depression is coming...


Cabdallah

In Bosaso they already have fake euro making machines[/quote]


lol dumb ass somalis, have you ever seen euro notes? its impossible to print that shit, they have shiny aluminium stuff in it and shit

[Leila2007]

There is a prediction that 2008 will have a major recession nothing like the great recession but to a certain extent. It has already started with high oil prices, troubled housing market that is affecting the world economy. The only thing that is current helping is China & Indians booming economic growth.

But 2008 looks like it will be a tough year! Esp for people with huge morgages to pay!

[Unclebin-]

Cabdallah

Canada has the same shiny stuff, Water mark seals, and invisible queen when put into the light.... But every tom ceeb and harry is trying to fix the situation up.


Leila

There was no great recession. It was called the great depression... Anywho.... only poor people will suffer... The rich will get richer.

[Aerosmith]

hmm.. You guys still haven't answered my question. How are they correlated assuming the US defaulted on debts. I can understand the US Devaluing its currency(for purpose of domestic boosts, good for business, increase in exports etc.) and for that matter lower Interest rate as seen in the relative employment rise. Still let me not deviate from my main question which is how are they related. How does debt default trigger currency devaluation!!! Help folks...

Damnit I feel like a black sheep walahi.

[Leila2007]

oops UB

Sorry for the confusion and yes you are right!

How are the rich going to get richer?

Aerosmith

The US economy is performing badly and therefore the dollar will devalue. It is all linked up with other countries (World market) and how every single economy is doing internally!