Is US debt really guaranteed? Buffett thinks so, and I think he's right … for now.

At a recent investor meeting, someone asked Warren Buffett: “Would the USA really be able to honor its debts?”

The “Sage of Omaha” quite rightly pointed out that the answer is a resounding “yes”. If the debt is to the nation that issues it, in the currency of that nation, then it can always be repaid. Always.

Whether the repayment will actually be worth anything at the point that it is cleared (which it probably won’t be unless our financial systems change drastically, which they may, but who knows?) is another question.

And probably a more relevant one.

PS: “The United States can pay any debt it has because we can always print money to do that.” – that works when you’re Top Nation with the de facto global reserve currency or at least a secondary power. Until you’re not anymore. See, for example, the UK up until 1956. So the “always” is rather optimistic.

source

Leave a Reply

Your email address will not be published. Required fields are marked *

payday smile logo

PaydaySmile.com is a financial technology company specializing in payday loans and financial solutions. With a keen focus on catering to payday lending needs, the company provides tailored loan options and tools to assist individuals seeking short-term financial assistance. It’s important to note that while we offer financial tools and resources, we are not a direct lender.

Advertiser Disclosure: This website is an independent, advertising-supported comparison service. The card offers that appear on this site are from companies from which this website receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). This website does not include all card companies or all card offers available in the marketplace. This website may use other proprietary factors to impact card offer listings on the website such as consumer selection or the likelihood of the applicant’s credit approval.

© 2024 PaydaySmile.com . All Rights Reserved.