USA is bankrupt and cannot even service its debt interest

$13 trillion might seem like a lot of money... but I bet it wouldn't take more than a couple of years to print it all.

Origional post obviously doesn't compute because US money is accepted and preferred world wide. You will have a better case when the euro becomes the world reserve currency.

I think this is relevant: http://americanfreepress.net/html/chinese_have_most_money_.html

China may have enough American money to buy Kansas but they couldn't vote on tax issues just because they own land or factories.

As scripture says, the half of all American credit card holders who owe an average $8,000 balance will have a problem when the crash comes. They are the ones who have sold out to the Chinese - the people who buy toys on credit. I should feel sorry for them?

The rest of us will do OK.

Stranger- are you talking about debts owned by the US federal government? Or are you talking about the net liabilities of the private sector and consumers?

Each of those is a very different kettle of fish...

The only difference between private and govt debt is that a powerful govt can't go bankrupt. It is the ultimate bank.

IF A person or a business loans money to the govt or to a another business or to a private person the accounting - the book keeping - is exactly the same.

Its not so much how the accounting is done which is the issue.... rather what are the functional results going to be for the US and the rest of the world.

Peak oil is a scam; there is plenty of oil around. The concept of war for oil is not really a scam if understood properly; it is about control of oil supply and production and the currency in which it is traded.

stranger said:

It is the US Treasury that is printing bills to export in bulk to China ... no nation has ever survived this approach to 'creative accounting' . money has to MEAN something more than just bits of paper saying 'IOU' else it becomes what it is .... valueless

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No, the government does not print the bills, it is the privately owned, privately run (for profit) Federal Reserve that does this, a very interesting topic in itself. Quite a few presidents got killed for trying to fix this.

Less than 2% of the money in circulation is cash. The Fed is a public corp. Every Fed insured bank is a owner. Any "profit" goes to the U.S. treasury.

You will not find The Federal Reserve listed in government pages; it is private.

"Any "profit" goes to the U.S. treasury."

Could you elaborate on / prove this?

Whilst the US's behaviour is problematic... and definately depends on where you stand- its a lot more nuanced than you seem to give credit for.

It is the US Treasury that is printing bills to export in bulk to China ... no nation has ever survived this approach to 'creative accounting' .

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As exo and bill pointed out currency is the smallest component of all money supplies, and ever since the 70s the US hasnt had control over the majority of its currency, so the situation is exactly new. What is new, however is the command China has over the currency, and the possible interdependence and hence implications for the power relations btwn the US and China.

'Creative Accounting' it is not- it can be many things, however Abba Lerner is probably someone worth listening to when it comes to money supply and his concept of functional finance.... it had never destroyed any country... plenty of livelihoods have been affected by issues related to monetary policy, but every modern western nationstate used inflationary monetary policy and/or debt financing at different stages- and to good effect on many occasions.

money has to MEAN something more than just bits of paper saying 'IOU' else it becomes what it is .... valueless

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True, however meaning is always something of a shared game... and as long as everyone is sbject to the discursive dominance of USD, at this stage primarily due transaction demand for trading in oil, the US will maintain its head above water...ish.

the world will not put up with it forever, so it is truly time to bear the pain of living within one's means, else one will be forced to live well below what one is sustainably able to do by more prudent behaviour today...

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I agree wholeheartedly, we are certainly squandering an abundance of resources, at detriment to ourselves and Gods world.

You can find a lot of Fed history at http://www.youtube.com/watch?v=I49AZU4rD3s. This is the first part - there are 7 in total - worth watching. Some parts of the Fed Reserve are of course secret by those who don't want us to know, so don't expect to find "official" word on this, but some interesting quotes....

Since I entered politics, I have chiefly had men's views confided to me privately. Some of the biggest men in the United States —in the fields of commerce and manufacturing—are afraid of somebody. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that they had better not speak above their breath when they speak in condemnation of it.” - (President) Woodrow Wilson

Woodrow Wilson signed the 1913 Federal Reserve Act. A few years later he wrote: I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men.


The real rulers of Washington are Invisible and exercise power from behind the scenes. - Justice Felix Frankfurter - US Supreme Court Justice

"It is well enough that people of the nation do not understand our Banking and Monetary system, for if they did, I believe there would be a Revolution before tomorrow morning." - Henry Ford


...not my words or being a consipracy theorist, but words by Presidents!

See the Fed's web site for info about the Fed.

Good idea.

Let's check out the Republican party website for info about how the Republican party is corrupt or the Democrat website for info about how the Democratic party is corrupt or the White House website for info about how the executive branch of government is corrupt.

The only alternative to the electronic money system is blasting the world back to the 13th century of city states and the city with the most guns wins.

The only alternative to the electronic money system is blasting the world back to the 13th century of city states and the city with the most guns wins

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Ummm... no... its not.... nor is the 'electric money system' even slightly descriptive or accurate of any existing financial systems... let alone really relevant to a thread about the functioning of central banks.