Couldn't the US be on the brink of destruction

dubeskin

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Mon Sep-22-08 09:27 PM
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Couldn't the US be on the brink of destruction

If all of our debtors just decided to call in all their loans? Seriously, it seems like even though Asia doesn't really need the money, if they were to potentially call in all of their bonds to us, and being like we are now in such poor economic shape, wouldn't it be entirely possible that our country would just ultimately collapse?

It's kind of a scary thought. We go all tough on national defense, trying to defend ourselves from terrorists, and yet our biggest threat are some wealthy Asian nations that would never have to raise a gun.

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skepticscott

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Mon Sep-22-08 09:30 PM
Response to Original message

1. I'm sure the idea has crossed their minds, at least in China

but they're smart enough to know that they can't wreck our economy without dragging themselves down with us. But they know they can exert just enough monetary pressure to cause us pain and perhaps get us to do things they want us to.

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NightWatcher

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Mon Sep-22-08 09:32 PM
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2. they'd never call in their loans because we're "good for it". but what if we're no longer

"good for it"?

What if our global credit rating were that of Lehman brothers or Wamu and listed as "junk"?

What happens when the rest of the world realizes that we're not good for it, anymore?

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Old and In the Way

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Mon Sep-22-08 09:35 PM
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3. We are extremely vulnerable to a currency attack.

The only thing stopping it is that the perp (most likely China or Saudi Arabia) would have almost as much to lose financially as we do. Say they dumped $50BB of Treasury bonds, looking to exit out of dollars. That would probably send a sell signal to everyone...but that would mean that their other holdings (maybe $950BB+ of USD) would be worth less. The more they dump, the less their reserves would be worth. Not sure that our dollar will hold up much longer, but it isn't in anyone's interests (inside the US or out) to make irrational market moves.

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curious one

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Mon Sep-22-08 10:43 PM
Response to Original message

4. destruction without a bloodshed or self destruct!

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