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When will the USA be bankrupt?

August 22, 2023 — BarryK

I haven't posted to this blog for a couple of days, so posting some thoughts about this question. Off-topic from my usual posts!

My knowledge of economics is rudimentary, so this post is really just expressing my puzzlement. But then, many economic experts don't seem to know what is going on either.

A couple of years ago, after reading how massive is the US foreign debt, and that it grows bigger every year, with no hope of paying it off, I wondered how is it that the country keeps going? Back then, I did a search and found what looks like the answer: the US Dollar is the international currency, and most of the money that the USA owes to the rest of the world is in US Dollars.

This means that if the US is on the verge of defaulting on repayments, all that it needs to do is devalue the US Dollar, that is, print more money.

That is going to mean US citizens will become poorer; everything is going to cost more. But it also means that the entities that have loaned the money will be getting less back; in other words, the USA is sucking wealth out of the rest of the world.

If the above summary is wrong, or an over-simplification, well, I did say my understanding is rudimentary. Anyway, that is what I have come understand is the current situation.

A little while ago, I ordered a recumbent trike from China, and had to pay in US Dollars. My little situation is repeated scaled up across the globe, and being the international currency is one factor that keeps the US Dollar afloat, or so it seems to me.

So, I was very interested to read of the upcoming BRICS alliance annual meeting in South Africa. History of BRICS is here, and most interesting is the list of countries that have applied this year to join:

What has really jumped out at me while reading about BRICS, is the move to an international currency exchange system, based on the value of gold. Here are some videos that explain more:

So, some countries are selling US bonds and buying gold. But why has the price of gold gone down again? -- I watch the price of gold in the finance section of the news on TV most evenings, and it has been trending down for awhile.

A couple of extra comments. I sometimes watch "The Electric Viking" channel on YouTube, and he has pointed out many times that Japan also is massively in debt, and Toyota, the biggest car manufacturer in the world is the most indebted company in the world.

OK, I have posted some links above, but won't post any more conclusions, as my knowledge is too limited. These guys made some interesting predictions, before the US had exited from Afghanistan:   

Tags: ethos