S.E. Washington | ccjersey - 5/23/2023 10:49
I don’t think you have thought about what it means to default on obligations when the whole concept of a security (and indeed “money”) depends on the confidence that you will always pay the returns as promised.
That’s a genie that can’t be stuffed back in the bottle.
Liberty Bonds?
WW1 timeframe, bonds sold with a "redeemable in gold" clause at $20 to an ounce. That was done to give confidence that they would not lose value to inflation.
Then due to the government revaluation of gold to $35 to the ounce, (still on the gold standard and under government control). At maturity, bond holders were paid in dollars on the face amount, and not the original gold equivalent, losing 40%of their purchasing power.
Writing down your own loan? Defaulting?
It's an old game with a new name and players. Its currency manipulation, and it's happened many times.
How about when we went off the gold standard altogether and what that did? Currency devaluation, stock market fluctuations, bond values, etc.
Edited by Turbo 8820 5/23/2023 13:24
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Wondering about the repercussions.
