The US govt is in no uncertain terms, a debtor organization. It needs new money on a constant basis for survival. Thus, evey action it takes must consider how it’s lenders will percieve its future stability and worthiness. You can bet that the Asian lenders, that’s most of who buys US debt, will be kept whole on anything that’s done by the govt. If the Asian countries decided that the US is no longer worthy, we’re in huge trouble. They’re basically divesting now anyway.
I have to believe that they will convert more of their debt paper in to dollars and then buy US natural resource companies. They want and need this stuff for their future anyway.They have to spend US$ to avoid increasing value of their own currency. And now US debt is getting to a level where servicing it will come into question and that’s the first critical step to insovency.
