Re:The horrifying AAA debt-issuance chart
by encoderer on Friday July 15, 2011 @04:52PM
(#2769044)
What we're talking about is: What is the risk of default of the tbills issued by the US treasury. It's conventionally considered that AAA means "1 in 10,000" chance of default.
Considering that tbills are issued with "the full faith and credit" of the United States and that it's against the US Constitution to default on them, the agencies have historically rated the debt as AAA.
And yes, technically, the US could not default and still pay back worthless bonds by deliberately hyper-inflating the currency.
Doing so would also make worthless all of the private debts demoninated in US Dollars and effectively destroy the US Economy.
While it's certainly possible that could happen, it's quite remote. Quite.
Considering that tbills are issued with "the full faith and credit" of the United States and that it's against the US Constitution to default on them, the agencies have historically rated the debt as AAA.
And yes, technically, the US could not default and still pay back worthless bonds by deliberately hyper-inflating the currency.
Doing so would also make worthless all of the private debts demoninated in US Dollars and effectively destroy the US Economy.
While it's certainly possible that could happen, it's quite remote. Quite.