GM Situation in US getting worse

[Romulus]

Originally Posted by baboon

China, UK, saudi, japanese etc. are lending the US all this bailout money. The money has to be payed back by the US. The US have to pay interest on the money they borrow, just like when you take out a house loan from the bank.

Now when other countries realize the US cannot payback the money, they stop lending to them. This is similar to someone who cannot make their house repayments to the bank. Hence they default on the loan and the lenders repossess the assets (or the house).

Now, Americas solution is to print there way out of this mess. The more money supply the less value each dollar is worth. The countries that lent the money to the US, now have these assets that are decreasing in value everyday. They try to sell these assets at fire sale prices, but nobody but the US government will buy them. Bugger that.

That's the point I was trying to make.

It wouldn't surprise me if the US dumped their dollar and changed currency to the Amero, leaving other countries with billions and billions of worthless US currency.