I have a question
🤔💭 Theory 😲💡
I am a brain dead, so I have a question for you smart people.
Let's assume that the debt ceiling talk cannot be resolved and we as a country default on our debt.
What happened then? Who are these debtors? What will they repo?
I understand all that about the default. We are only making payments on interest, and not even principal. Ridiculous. I would like to go for a default where these demons lose their credit cards so they can no longer just borrow and spend. As a citizen, I just want to know what will be repo because of the principal.
When you buy a US government bond, there is no collateral. You trust the US Government to repay you when the bond comes due. If they don't, you are just shit out of luck, end of story. Bad on you for trusting them.
It is fundamentally different than a car loan or a home mortgage where you sign papers that if you default they can take your car or home from you.
So no repo at all. But there would be extreme repercussions for US residents if they actually stop paying interest, or devaluate the currency so the interest is worth nothing.
Oh so the bonds are worthless. I understand. I don't have bonds any way. Those holding cd would probably sol also.