USA Shed debt

U.S. debt vote highlights bitter divide


Now let me see if I understand the situation here.

Everyone and the dog bought up usa debt , and they're holding various treasury bonds that have a specific number of usa dollars on them. Say , 100$ bonds , as an example.

so , the USA decides it's spending too much money. More than it has. And it tries to cut back , but the two political houses fight and that doesn't happen, so they print more money.

And when they print more money , the value of the US dollar goes down.

so the 100$ treasurey bond you bought , is suddenly worth only 90% of what it was yesterday , even though it is still worth 100$ , those dollars are now smaller dollars so to speak.

And where did the 10% go ? The value that the bonds lost ?

Why , it's in the USA. The new money they printed has that 10%.

So , by printing more money , they have effectively "Shed" debt. Not payed it off, just dropped it in the trash like last weeks refuse.

And everyone in the world is holding those bonds , or at least their nations are.

so by printing more money, the USA has effectively reached into every bank account in the world and taken a little bit out, without bothering to ask anyone for permission. Because part of the value of *YOUR* currency is based on how many assets your nation has, and holding us debt is considered an asset. An asset that just shrank when the usa printed more money.

Welcome to world economics . Lesson 1: It's great to be the bench mark currency of the entire world.