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Re:India’s banking system is flirting with a Lehman moment by cm2187 on Saturday November 10, 2018 @06:11AM (#18420849)
State defaults and restructurings don't quite work like that. If the state won't pay its debt there is not much you can do to enforce it.

The real difference is that the US or European countries are borrowing in their own currency and under their own laws (well for euro area countries, sort of). So they will inflate their debt away. EM countries typically borrow in USD and often under foreign law and don't have the option to inflate away.

But Greece found itself with effectively a foreign currency debt (EUR which they don't control) and ended up defaulting (well, technically "restructuring" but that's the same).

Re:India’s banking system is flirting with a Lehman moment by jon_richards on Saturday November 10, 2018 @06:25AM (#18420888)
What's really weird is that if the USA started inflating their debt away, the value of their debt would drop and they'd need to start borrowing at a higher rate.

As long as the USA willing to increase the size of their debt, that doesn't happen.

For this to continue, people need to keep lending the USA money, so that the USA can pay off their old debts. People are willing to lend the USA money as long as they don't think the USA will start inflating their debt away.

There isn't really a limit to this. Loans to the USA are stable because people keep loaning to the USA because loans to the USA are stable. The size of the debt doesn't affect that equation.

Re:India’s banking system is flirting with a Lehman moment by icelancer on Saturday November 10, 2018 @06:31AM (#18420900)
> So they will inflate their debt away.

You say this, but it doesn't work nearly as easily as you seem to think. You cannot just devalue your currency and pay people off with zero effects. And if that was actually a threat, the US would not have an AAA credit rating.

Re:India’s banking system is flirting with a Lehman moment by gboss on Saturday November 10, 2018 @03:44PM (#18423403)
The US doesn't actually have an AAA rating anymore according to S&P it's an AA+.

https://en.m.wikipedia.org/wiki/United_States_federal_govern...

Re:India’s banking system is flirting with a Lehman moment by cm2187 on Saturday November 10, 2018 @08:16AM (#18421204)
Oh I agree, inflation is nasty. This accumulation of debt will end in tears.
Re:India’s banking system is flirting with a Lehman moment by kopo on Saturday November 10, 2018 @06:32AM (#18420902)
Which is why ratings play a role.

If Somalia decides they love their goats too much and are not handing them over, their ratings get trashed.