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Originally Posted by john_wai  Quote:
Originally Posted by hehehehaha [ this post]
The moral of the story - USA debt is in USD, just print more. Cash is king. |
Not necessary... it is like you have outstanding housing debts that is maturing, you can take new loans to repay your existing maturing debts without having to increase your overall debt burden.. You merely "extended" the duration of your existing maturing debts by "rolling" them over to another new debt..
So, there should not be any impact on your credit ratings.... |
No impact in credit ratings only if U DO NOT increase the debt level... Greece had been doing this for ages, increasing their debt to GDP ratio from zero to >140% until someone said: I don't think that they can logically repay because too much of national income is being spent on interest payments on its gargantuan debt burden; in lieu for a risk of a haircut or default, people are charging them a high interest to roll over into new debt (latest I know, coupon expected is in region in excess of 25%). E.g. the credit card company may charge U lower interest (say 4% p.a.)to borrow say $5K for 6 mths (credit line) but if have a bad credit history or are bankrupt, no banks would be willing to lend to you no matter when or at what interest rate you offer to repay.
And that is the current problem that Greece, like Zimbabwe once faced. Less that a decade ago, Zimbabwe turbo boosted their printing presses, the photos in my last post show them doing precisely that... U can see where they are now, a country with no currency because nobody trusts their government and nobody would accept such money (except hobbyist/ collectors of course and only at a low fee for mint quality currency).
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05Jan2012: World’s Biggest Economies Face $7.6T Debt
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